Segmented income statements are most meaningful to managers when they are prepared
A)on an absorption cost basis.
B)on a cost behaviour (contribution) basis.
C)on a cash basis.
D)in a single-step format.

Question

Quizplus · Accepted Answer

Segmented income statements that are prepared on a cost behavior or contribution margin basis allow managers to focus on the profitability of different segments of the business. This approach separates fixed and variable costs, making it easier to identify which segments are most profitable and which require further attention. The other options - absorption cost basis, cash basis, or single-step format - do not provide the same level of detail or insights into segment profitability.

Segmented Income Statements Are Most Meaningful to Managers When They