Question
Which of the following statements concerning performance evaluation tools used in decentralized operations is correct? A. A positive residual income indicates that a segment's return
Which of the following statements concerning performance evaluation tools used in decentralized operations is correct?
A.
A positive residual income indicates that a segment's return on investment is less than the company's target rate of return.
B.
Segment margin is calculating by subtracting the common fixed costs allocated to a segment from the segment's contribution margin.
C.
Segmented income statements are also referred to as budget versus actual reports.
D.
Performance reports can only be used to evaluate the performance of cost centers.
E.
A segment's return on investment can be calculated by multiplying the segment's sales margin percentage by its capital turnover ratio.
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