FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Which of the following statements concerning performance evaluation tools used in decentralized operations is correct?
A. Performance reports can only be used to evaluate the performance of cost centers.
B. A negative residual income indicates that a segment's return on investment is greater than the company's target rate of
return.
C. Segment margin is calculated by subtracting a segment's total traceable costs from its sales revenue.
D. A segment's return on investment can be calculated by dividing the segment's sales margin percentage by its capital
turnover ratio.
O E. Segmented income statements are also referred to as budget versus actual reports.
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Transcribed Image Text:Which of the following statements concerning performance evaluation tools used in decentralized operations is correct? A. Performance reports can only be used to evaluate the performance of cost centers. B. A negative residual income indicates that a segment's return on investment is greater than the company's target rate of return. C. Segment margin is calculated by subtracting a segment's total traceable costs from its sales revenue. D. A segment's return on investment can be calculated by dividing the segment's sales margin percentage by its capital turnover ratio. O E. Segmented income statements are also referred to as budget versus actual reports.
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