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1) Which of the following statements is true? I. Allocating common fixed costs to segments on segmented income statements increases the usefulness of such statements. II. If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost should be considered a common cost. Both statements are true. Only statement Il is true. Neither statement is true. Only statement I is true. 2) Which of the following statements is true? 1. When a company is involved in more than one activity in the entire value chain, it is vertically integrated. II. A vertically integrated company is less dependent on its suppliers than a company that is not vertically integrated. III. A disadvantage of vertical integration is that by pooling demand for parts from a number of companies, a supplier may be able to enjoy economies of scale that result in higher quality and lower cost than if every company makes its own parts. None of the statements are true. All of the statements are true. Only statement Ill is true. Only statement I is true.

1) Which of the following statements is true? I. Allocating common fixed costs to segments on segmented income statements increases the usefulness of such statements. II. If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost should be considered a common cost. Both statements are true. Only statement Il is true. Neither statement is true. Only statement I is true. 2) Which of the following statements is true? 1. When a company is involved in more than one activity in the entire value chain, it is vertically integrated. II. A vertically integrated company is less dependent on its suppliers than a company that is not vertically integrated. III. A disadvantage of vertical integration is that by pooling demand for parts from a number of companies, a supplier may be able to enjoy economies of scale that result in higher quality and lower cost than if every company makes its own parts. None of the statements are true. All of the statements are true. Only statement Ill is true. Only statement I is true.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 1DQ: Explain the meaning of (A) differential revenue, (B) differential cost, and (C) differential profit...
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1) Which of the following statements is true? I. Allocating common fixed costs to segments on segmented income statements increases the usefulness of such statements. II. If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost should be considered a common cost. Both statements are true. Only statement il is true. Neither statement is true. Only statement I is true. 2) Which of the following statements is true? 1. When a company is involved in more than one activity in the entire value chain, it is vertically integrated. II. A vertically integrated company is less dependent on its suppliers than a company that is not vertically integrated. III. A disadvantage of vertical integration is that by pooling demand for parts from a number of companies, a supplier may be able to enjoyeconomies of scale that result in higher quality and lower cost than if every company makes its own parts. None of the statements are true. All of the statements are true. Only statement Ill is true. Only statement I is true.
Transcribed Image Text:1) Which of the following statements is true? I. Allocating common fixed costs to segments on segmented income statements increases the usefulness of such statements. II. If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost should be considered a common cost. Both statements are true. Only statement il is true. Neither statement is true. Only statement I is true. 2) Which of the following statements is true? 1. When a company is involved in more than one activity in the entire value chain, it is vertically integrated. II. A vertically integrated company is less dependent on its suppliers than a company that is not vertically integrated. III. A disadvantage of vertical integration is that by pooling demand for parts from a number of companies, a supplier may be able to enjoyeconomies of scale that result in higher quality and lower cost than if every company makes its own parts. None of the statements are true. All of the statements are true. Only statement Ill is true. Only statement I is true.
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