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Module_22_Multiple_Choice_Ans

# Module_22_Multiple_Choice_Ans - Module 22 Multiple Choice...

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Module 22 Multiple Choice MC22-1 Segment Report LO1 A segment report can be prepared: Solution c. A segment report can be prepared for any portion of the company for which segment data can be generated, where or not it coincides with the managerial organization of the company. MC22-2 Segment Reports LO1 Segment reports are most often produced to coincide with: Solution b. Although segment reports can be prepared based on many different criteria, they are most often based on the managerial lines of responsibility. MC22-3 Segment Report for Territories LO2 In a segment report for territories, the contribution margin less direct segment fixed costs is typically called the: Solution c. For a territorial segment, the segment margin is generally referred to as the territory margin. MC22-4 Segment Reporting LO2 Which of the following statements about segment reporting is NOT true? Solution c. Segment reports prepared for product lines are a frequent basis for preparing segment reports. MC22-5 Segment Costs LO2 Which of the following statements about indirect segment costs is correct? Solution d. Indirect segment costs are costs that support all segments in a segment report that are typically allocated to the various segments. MC22-6 Discontinuing a Segment LO2 Which of the sources listed below would a manager be LEAST likely to consider in deciding whether or not to discontinue a given segment? Solution c. Common segment cost will continue whether or not a segment is discontinued, so they are irrelevant to the decision. MC22-7 Division Contribution Calculation LO2 Martin Company is a two-division firm and has the following information available for this year: Common fixed costs \$400,000 Direct fixed costs of Division A 100,000 Direct fixed costs of Division B 200,000 Sales revenue of Division A 400,000 Sales revenue of Division B 600,000 Variable costs of Division A 120,000 Variable costs of Division B 180,000 What is Division B's contribution margin? Solution a. Division B Sales (\$600,000) less Division B Variable Costs (\$180,000) = \$420,000 ©Cambridge Business Publishers, 2008 Financial & Managerial Accounting for MBAs, 1 st Edition

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MC22-8 Segment Margin Calculation LO2 Martin Company is a two-division firm and has the following information available for this year: Common fixed costs \$400,000 Direct fixed costs of Division A 100,000 Direct fixed costs of Division B 200,000 Sales revenue of Division A 400,000 Sales revenue of Division B 600,000 Variable costs of Division A 120,000 Variable costs of Division B 180,000 What is Division A's division segment margin? Solution b. Division A Sales (\$400,000) less Division A Variable Costs (\$120,000) less Division A Direct Fixed Costs (\$100,000) = \$180,000 MC22-9 Avoidable Costs LO2 Costs that would NOT be incurred if the segment were discontinued are called. Solution d. Avoidable costs, as the term implies, are costs that will be avoided (not incurred) if the segment is discontinued. In addition, variable costs are eliminated if the segment is discontinued.
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