Departmental income statements provide management with information necessary for decision-making.Which of the following is NOT a decision made possible by these statements?

Question

Quizplus · Accepted Answer

Departmental income statements provide information on the performance of each department and the costs incurred by each department. They help management to make decisions regarding which departments to expand or eliminate, and where improvements are needed. However, the decision of what base to use to allocate costs is not made by the departmental income statement, but rather by the management accounting system.

Departmental Income Statements Provide Management with Information Necessary for Decision-Making