ZuoTi.Pro
Question

A company has two divisions, each selling several products. If segment reports are prepared for each...

A company has two divisions, each selling several products. If segment reports are prepared for each product, the division managers' salaries should be considered as traceable fixed costs of the products.

True or False?

All other things the same, if a division's traceable fixed expenses increase then the division's segment margin will decrease.

True or False?

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Division manager's salary cannot be divided among different products as the division manager's salary is generally fixed and does not vary with time or other factors of each product. Division manager's salary is therefore considered as common fixed costs and is not allocated to product. The salary is deducted from total segment margin as common costs.

Thus, the statement is false.

Segment margin is calculated as sales of each division less direct costs related to each division. Direct costs include variable costs plus fixed costs which are traceable to the division. If the traceable fixed costs increases then segment margin would decrease.

Thus, the statement is true.

0 0
Add a comment
Know the answer?
Add Answer to:
A company has two divisions, each selling several products. If segment reports are prepared for each...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 5 Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The...

    5 Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental Products Division's divisional segment margin is $35,300 and the Export Products Division's divisional segment margin is $87,700. The total amount of common fixed expenses not traceable to the individual divisions is $97,200. What is the company's net operating income (loss)? Multiple Choice $220,200 $123.000 $25,800 ($123,000) Mc Graw Hall Education < Prev 5 of 10 Next > Delisa Corporation has two divisions: Division...

  • Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental...

    Dukelow Corporation has two divisions: the Governmental Products Division and the Export Products Division. The Governmental Products Division's divisional segment margin is $35,800 and the Export Products Division's divisional segment margin is $88,200. The total amount of common fixed expenses not traceable to the individual divisions is $98,000. What is the company's net operating income foss)? Multiple Choice O $222,000 O $124,000 o Oo oo О $26,000 15124,000) Combe Corporation has two divisions: Alpha and Beta. Data from the most...

  • Danny's Dart Company produce and sells darts to customers. Danny's Dart Company has two divisions: the...

    Danny's Dart Company produce and sells darts to customers. Danny's Dart Company has two divisions: the Casino Products Division and the International Products Division. The Casino Products Division's divisional segment margin is $38,300 and the International Products Division's divisional segment margin is $90,700. The total amount of common fixed expenses not traceable to the individual divisions is $102,000. What is Danny's Dart Company net operating income (loss)? Garrison 16e Rechecks 2018-06-22 Multiple Choice ($129,000) $129,000 $27,000 $231,000

  • Assume a company with two divisions (A and B) prepared the following segmented income statement: Sales...

    Assume a company with two divisions (A and B) prepared the following segmented income statement: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income A $ ? 120,000 ? 100,000 $ ? B $ 200,000 140,000 ? 80,000 $ (20,000 What is Division A's segment margin? Multiple Choice O $53,000 $13,000 $72,700 100,000 $ ? 80,000 $ (20,000 $ Traceable fixed expenses Segment margin Common fixed expenses Net operating income What is Division...

  • Carroll Corporation has two products, Q and P. During June, the company's net operating income was...

    Carroll Corporation has two products, Q and P. During June, the company's net operating income was $27,000, and the common fixed expenses were $58,000. The contribution margin ratio for Product Q was 40%. Its sales were $143.000, and its segment margin was $50,000. If the contribution margin for Product P was $48,000, the segment margin for Product P was: Multiple Choice $35,000 O $50,000 O O "ounle Corporation has two divisions: the South Division and the West Division. The corporation's...

  • All other things equal, if a division's traceable fixed expenses increase: A) the division's segment margin...

    All other things equal, if a division's traceable fixed expenses increase: A) the division's segment margin will increase. B) the overall company net operating income will decrease. C) the division's contribution margin will decrease. D) the division's sales volume will increase.

  • Yuri's Yacht Company manufactures and sells Yacht's to cusomers. Yuri's Yacht Company has two divisions: the...

    Yuri's Yacht Company manufactures and sells Yacht's to cusomers. Yuri's Yacht Company has two divisions: the North Division and the South Division. Yuri's Yacht Company's net operating income is $93,000. The North Division's divisional segment margin is $44,000 and the South Division's divisional segment margin is $174,600. What is the amount of the common fixed expense not traceable to the individual divisions? Multiple Choice $267,600 $218,600 $125,600 $137,000

  • Ine manufactures two different products. For many years, the company has been profitable and operates at...

    Ine manufactures two different products. For many years, the company has been profitable and operates at full capacity. However, in the last two years le prices were reduced and selling expenses increased because of the competition. Budgeted data for next year are the followings: 20.000 $220 $130 AZ 10.000 $140 $100 Sales in units Sale price per unit Variable manufacturing costs Variable selling expenses Fixed MOH Fixed Selling expenses $30 $10 $600,000 $200.000 $400,000 $100,000 Additional information: a) All the...

  • Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating...

    Uchimura Corporation has two divisions: the AFE Division and the GBI Division. The corporation's net operating income is $12,200. The AFE Division's divisional segment margin is $83,600 and the GBI Division's divisional segment margin is $48,300. What is the amount of the common fixed expense not traceable to the individual divisions? Multiple Choice $95,800 $119,700 $60,500 $131,900

  • QUESTION 4 The Compass Company has two divisions - North and South. The divisions have the...

    QUESTION 4 The Compass Company has two divisions - North and South. The divisions have the following Revenues and Expenses: North South $710,000 300,000 210,000 100,000 100,000 Management at Compass is considering the elimination of the North Division. If the North Division is Sales Variable Expenses Traceable Fixed Expenses Allocated Common Corporate Expenses Net Operating Income or (Loss) $900,000 450,000 260,000 240,000 (50,000) eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT