All of the Following Statements Regarding a Business Segment Are

question 36

Multiple Choice

All of the following statements regarding a business segment are true except:

• A)A business segment is a part of a company's operations that serves a particular product line.
• B)A segment has assets,liabilities,and financial results of operations that can be distinguished from those of other parts of the company.
• C)A company's gain or loss from selling or closing down a segment is reported separately.
• D)The income tax effects of a discontinued segment are combined with income tax from continuing operations.
• E)A segment's income for the period prior to the disposal and the gain or loss resulting from disposing of the segment's assets are reported separately.

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Definitions:

Variable Costing

A costing method that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of a product.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as rent, salaries of permanent staff, and equipment depreciation.

Product Cost

The total cost associated with producing goods, including raw materials, labor, and overhead costs.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.