To calculate income before taxes for a segmented company as a whole,take contribution by segments and subtract ________.
A) allocated costs
B) unallocated costs
C) costs controllable by segment managers
D) costs controllable by third parties

Question

Quizplus · Accepted Answer

Income before taxes for a segmented company as a whole is calculated by taking the contribution by segments and subtracting unallocated costs. Allocated costs are already accounted for in the contribution by segments, and costs controllable by segment managers and third parties may or may not be included in the contribution by segments. Therefore, subtracting unallocated costs will provide the most accurate calculation of the company's income before taxes.

To Calculate Income Before Taxes for a Segmented Company as a Whole,take