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Unformatted text preview: 1 Ch. 12 ADM 2341 Segment Reporting 1 Ch. 12 Segment Reporting A Responsibility Centre (segment) is any part or activity of an organization about which the manager seeks revenue or cost data. e.g. sales territories, products, plants divides the previous segment into smaller and smaller pieces if possible, calculates the contribution margin for the segment and then requires identification of traceable fixed costs Cost, Expense, Revenue, Profit, and Investment Centres 2 Ch. 12 ADM 2341 Segment Reporting 2 Traceable and Common Costs Traceable fixed costs are those fixed costs that can be identified with a particular segment and that arise because of the existence of the segment. Two types: 1.Discretionary vs 2.Committed Common fixed costs are those fixed costs that cannot be identified with any particular segment but rather arise because of overall operating activities 3 Ch. 12 ADM 2341 Segment Reporting 3 Allocation Guidelines Guidelines for assigning costs to the various segments of a company: 1. First, according to cost behaviour patterns ie variable or fixed.ie variable or fixed....
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This note was uploaded on 09/13/2011 for the course ADM 2341 taught by Professor Managerialaccounting during the Winter '07 term at University of Ottawa.
- Winter '07