Segmented statements for internal use should be prepared in the contribution format.

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Segmental analysis of financial statements for internal use should be prepared in the contribution format. This analysis helps management to understand the profitability of various business segments and make effective decisions regarding resource allocation and cost control. The contribution format separates fixed costs from variable costs, making it easier to identify areas for cost reduction and revenue enhancement.

Segmented Statements for Internal Use Should Be Prepared in the Contribution