Accounting for IGCSE & O level - Final Statements (Section 9 - No. 26)
What is the importance of identifying each department's contribution to profit or loss?
To determine the owners salary
To identify the departments that are performing well or poorly.
To reduce business tax
To calculate the company's market share.
Paliwanag
The profit or loss of each department allows managers to assess the business performance at a lower level.