Departmental income statements provide management with the 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 revenue, expenses, and profit of each department. This information can be used to make decisions such as where improvements are needed, which departments to expand, and whether to eliminate a department. However, the decision on what base to use to allocate costs is typically made when designing the cost accounting system, and is not directly related to the information provided by departmental income statements.

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