Which of the Following Statements Is True Regarding a Company's

question 29

Multiple Choice

Which of the following statements is true regarding a company's segment margin?

• A) It is primarily used to make short-term decisions such as cost-volume-profit (CVP) analysis and special order decisions.
• B) It ignores all fixed costs.
• C) It is primarily a measure of long-term profitability.
• D) It should not be used to make decisions on whether or not to drop a product line.

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Definitions:

Empirical Evidence

Information acquired by observation or experimentation that is used to confirm the validity of a hypothesis or theory.

Logical

Pertaining to reasoning or the application of strict principles of validity in reasoning, often used in the context of logical deduction or argumentation.

Unobserved

Not seen or noticed, often referring to variables or factors that have not been measured or accounted for in a study or experiment.

Foundation

The basis or groundwork of an idea, structure, or theory from which further growth, development, or understanding can occur.