Assume You Are Preparing an Income Statement with Different Segments

question 62

Multiple Choice

Assume you are preparing an income statement with different segments.To calculate the contribution by segment,take contribution controllable by segment manager minus ________.

• A) unallocated costs
• B) variable operating expenses
• C) fixed costs controllable by others(not segment manager)
• D) fixed costs controllable by segment manager

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Definitions:

Short-run Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the quantity of output produced, calculated when some factors of production are fixed.

Factory

A manufacturing facility where goods are produced or assembled.

Efficient Scale

The level of production at which a company can produce its products at the lowest average cost per unit, maximizing efficiency.

Halo Effect

The cognitive bias where the perception of one positive trait influences the perception of other traits of an individual or entity.