In determining if two operating segments may be combined into one, which of the following factors should be considered?
A)similarities regarding profit margins
B)whether the nature of the products and services is similar
C)whether there is a similar amount of intracompany sales
D)whether there is a similar number of employees

Question

In determining if two operating segments may be combined into one, which of the following factors should be considered?
A)​similarities regarding profit margins
B)​whether the nature of the products and services is similar
C)​whether there is a similar amount of intracompany sales
D)whether there is a similar number of employees​

Quizplus · Accepted Answer

The nature of the products and services provided by each operating segment is an important factor to consider when determining if segments can be combined. Similarities in product and service offerings can indicate that the segments are related and can potentially be combined. Other factors such as profit margins, intracompany sales, and number of employees may also be relevant, but they are not as important as the nature of the products and services provided.

In Determining If Two Operating Segments May Be Combined into One