The objective of segment profitability decisions is to identify the segments that have a negative segment margin so that managers can drop them or take corrective actions.

Question

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The statement is correct. The main objective of segment profitability decisions is to identify the segments that are not making enough profit or are making losses so that managers can take corrective actions, such as dropping unprofitable segments or improving their performance to achieve positive segment margins.

The Objective of Segment Profitability Decisions Is to Identify the Segments