An Entity Is Permitted to Aggregate Operating Segments If the Segments

question 15

Multiple Choice

An entity is permitted to aggregate operating segments if the segments are similar regarding the:

• A) nature of the production processes.
• B) types or class of customers.
• C) methods used to distribute products or provide services.
• D) all of these.

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Definitions:

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of completed units for inventory valuation.

Production Department

The division within a business that is charged with the manufacture of goods or the provision of services.

Materials Consumed

The direct raw materials used in the production process during a specific period.

Conversion Costs

Expenses incurred during the transformation of raw materials into finished products, including labor and overhead.