Ansfield, Inc For Ansfield, Inc

question 62

Multiple Choice

Ansfield, Inc.has several potentially reportable segments.The following financial information has been determined for the current fiscal year: ?

$$\begin{array} { l r } \text { Consolidated net income } & \$ 1,000,000 \\\text { Operating income before taxes } & 1,500,000 \\\text { Net operating income of all segments } & 1,350,000 \\\text { Total consolidated revenue } & 8,000,000 \\\text { Total revenue of all segments, } & \\\text { excluding intersegment sales } & 7,000,000 \\\text { Total intersegment sales } & 1,200,000 \\\text { Consolidated total assets } & 50,000,000 \\\text { Total assets of all segments } & 45,000,000\end{array}$$ For Ansfield, Inc.to report a significant portion of its financial information as segments, its segments, in total, must represent

• A)$37,500,000 in assets.
• B)$6,000,000 in revenues.
• C)$1,125,000 in operating income before taxes.
• D)The answer cannot be determined from the information given.

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Definitions:

Short Run

A period in which at least one factor of production is fixed, limiting the ability of the economy or firm to adjust to changes.

Long Run

A period of time in which all factors of production and costs are variable, allowing for full adjustment to change.

Marginal Cost Curve

The marginal cost curve graphically represents how the cost of producing one additional unit of a good changes as production volume varies.

Marginal Product

The increased output achieved by adding one more unit of a certain input, with all other inputs held steady.