Ch. 10 HW Solutions - CHAPTER 10 SEGMENTED REPORTING,...

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CHAPTER 10 SEGMENTED REPORTING, INVESTMENT CENTER EVALUATION, AND TRANSFER PRICING QUESTIONS FOR WRITING AND DISCUSSION 1. In centralized decision making, decisions are made at the very top level, and lower-level managers are responsible for implementing these decisions. For decentralized decision making, decisions are made and implemented by lower-level managers.to several cost objects. The distinction is important because direct fixed costs will vanish if the cost object is eliminated but common fixed costs will not. 10. Contribution margin is the amount available to cover fixed expenses and provide for profit. Segment margin is the amount available to cover common fixed expenses and provide for profit for a segment. Contribution margin is the difference between revenues and variable expenses. Segment margin is contribution margin less direct fixed expenses for a segment. 11. Absorption-costing income can increase from one period to the next if more is produced than what is sold. Even though the fixed costs may not have changed, the fixed costs recognized on the income statement can change (because of inventory changes). 13. Margin = Operating income/Sales, and Turnover = Sales/Average operating assets. By breaking ROI into margin and turnover, more information is available to assess performance. Knowledge of margin and turnover gives more insight into why the ROI may change from one
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This note was uploaded on 10/21/2009 for the course ACG 2071 taught by Professor Unauth during the Spring '09 term at University of South Florida - Tampa.

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Ch. 10 HW Solutions - CHAPTER 10 SEGMENTED REPORTING,...

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