Accounting for IGCSE & O level - Final Statements (Section 1 - No. 7)
It is important to identify the contribution to profit or loss of each department in a business because it allows for:
Identifying and investigating poor performance.
Securing managers and employees fairly in each department for good performance.
Improving overall profitability by taking actions to improve the performance of poor-performing departments or by shutting down loss-making ones.
Ignoring individual department performances.
Erläuterung
This is mentioned in the text under the section on departmental accounts.