QUESTION 7 What is the purpose of reporting for segments? To separate information so users understand the financial position of the company and its components better, where components may be defined in various ways To separate the financial statements of parents and subsidiaries To eliminate any reporting differences from one company to the next To assure that users of information have adequate information about product lines QUESTION 8 How should firms allocate common costs? Joint costs should be charged to the most profitable segment Expense pools should be allocated based on benefits to each segment All common costs should be divided equally among segments Any expenses not in a pool should be charged to corporate management