Question

What costs are assigned to a segment under the contribution approach

Answer 1

Under the contribution approach, the costs assigned to a segment are the variable costs.

Step-by-step explanation:

Under the contribution approach, the costs assigned to a segment are the variable costs. Variable costs are the costs that vary directly with the level of production or sales and include expenses such as materials, labor, and utilities. Unlike fixed costs, which remain constant regardless of the level of output, variable costs change in proportion to the volume of activity.