BA450HW6[1] - BA 450 6-1 3. Segment profit is total revenue...

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BA 450 6-1 3. Segment profit is total revenue less operating expenses. In computing segment profit, none of the following items has been added or deducted: general corporate expenses, interest revenue, interest expense, income taxes, or extraordinary items – in this case a loss relating to the company’s operations in Segment B. Depreciation for divisions B and C was $15,000 and $6,000 respectively. Capital expenditures of Divisions B and C amounted to $50,000 and $27,000 respectively, in 2010 and are included in the total company assets at year end. 4. Profit Margin before Income Taxes = Segment Profit Segment Revenues from Sales Division B: $54,000= 15.0% $360,00 0 Division C: $20,700= 13.8% $150,00 0 Other Divisions: $5,600= 6.2% $90,000 These ratios reveal that the 2 reportable divisions (A and B) have a higher profit margin than the other operating divisions. This may indicate less efficiency in the control of costs and expenses in the other divisions.
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6-6 1. An usual but infrequently occurring charge does not meet the unusual-in-nature criterion so it is not an extraordinary item. Therefore, it is presented in the ordinary operations section of the income statement but it should have been reported as a separate item rather than as part of
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This note was uploaded on 04/20/2010 for the course BA 450 taught by Professor Fults,g during the Fall '08 term at Humboldt State University.

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BA450HW6[1] - BA 450 6-1 3. Segment profit is total revenue...

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