Question
Which of the following statements concerning performance evaluation tools used in decentralized operations is correct? A. Segment margin is calculated by subtracting a segment's total
Which of the following statements concerning performance evaluation tools used in decentralized operations is correct?
A.
Segment margin is calculated by subtracting a segment's total traceable costs from its sales revenue.
B.
A segments return on investment can be calculated by dividing the segments sales margin percentage by its capital turnover ratio.
C.
Segmented income statements are also referred to as budget versus actual reports.
D.
A negative residual income indicates that a segments return on investment is greater than the companys target rate of return.
E.
Performance reports can only be used to evaluate the performance of cost centers.
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