An Enterprise Has Eight Reporting Segments

question 36

Multiple Choice

An enterprise has eight reporting segments.Five segments show an operating profit and three segments show an operating loss.In determining which segments are classified as reporting segments under the operating profits test,which of the following statements is correct?

• A)The test value for all segments is 10% of consolidated net profit.
• B)The test value for profitable segments is 10% or more of those segments reporting a profit,and the test value for loss segments is 10% or more of those segments reporting a loss.
• C)The test value for loss segments is 10% of the greater of (a)the absolute value of the sum of those segments reporting losses,or (b)10% of consolidated net profit.
• D)The test value for all segments is 10% of the greater of (a)the absolute value of the sum of those segments reporting profits,or (b)the absolute value of the sum of those segments reporting losses.

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Definitions:

Machines

Mechanical or electrical devices that perform specific tasks or assist in completing work more efficiently.

Labor

Labor represents the human effort, both physical and mental, used in the production of goods and services.

Total Costs

The total of all costs associated with the production of goods or services, encompassing both fixed and variable expenses.

Conditional Labor Demand

The demand for labor by employers, which is contingent upon certain conditions, such as wage rates or economic environment.