Question

A company has five operating segments. Below is the relevant segment information.

Refer to the above information. Which of the operating segments above meet the operating profit (loss) test company has five operating segments. Below is the relevant segment information.
Refer to the above information. Which of the operating segments above meet the operating profit (loss) test?
a)B, C, D, and E
b)A and D
c)B, C, and D
d)A, B, and D

Answer 1

Segments B, C, D, and E meet the operating profit (loss) test. The correct option is A.

Step-by-step explanation:

The operating profit (loss) test evaluates the profitability of each operating segment. To determine which operating segments meet this test, we need to look at the relevant segment information provided.

From the information given, we can see that segment A has an operating loss of $10 million, segment B has an operating profit of $5 million, segment C has an operating profit of $8 million, segment D has an operating profit of $3 million, and segment E has an operating loss of $2 million.

Based on this information, the operating segments that meet the operating profit (loss) test are segments B, C, D, and E, as they all have either positive operating profits or losses.