Whitley Corporation Identified Four Operating Segments: Automotive, Electrical, Lawn Equipment

question 109

Short Answer

Whitley Corporation identified four operating segments: Automotive, Electrical, Lawn Equipment, and Sporting Goods.Automotive met the revenue test and the profit or loss test.Electrical met all three tests.Lawn Equipment met only the asset test.Sporting Goods did not meet any of the three tests.Which of these segments must be disclosed separately?

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Definitions:

Low Switching Costs

Low switching costs refer to the minimal barriers or expenses that consumers face when changing from one product, service, or provider to another, leading to higher competition among companies.

Substitute Products

Goods or services that can serve as replacements for each other, meeting the same needs or desires of the consumers, thereby providing a choice.

Potential Substitutes

Products or services that serve as alternatives to an organization's offerings, which consumers might consider if available or for better value.

Average Profitability

The mean financial gain or return from an investment or business operation after subtracting all expenses.