Exam 4 REVIEW

# Exam 4 REVIEW - Exam 4 Study Suggestions How do you...

This preview shows pages 1–2. Sign up to view the full content.

Exam 4 Study Suggestions How do you calculate ROI? Company has two divisions and net operating income is \$18,500. Division A’s divisional segment margin is \$27,700 and Division B’s divisional segment margin is \$49,400. What is the amount of the common fixed expense not traceable to the individual divisions? Is there a disadvantage to using residual income to measure performance? If so, what is it? Know the three types of business segments: cost, revenue, and Investment, and what they are responsible for. Be able to calculate residual income. A company has two segments. Given Sales Revenue for both segments, Variable Expenses for both segments, Traceable Fixed Expenses for both segments, Common fixed expenses. (Remember: DO NOT include allocate COMMON fixed expenses to a segment’s contribution margin!!!) Calculate Contribution margin for one or both segments Operating income of company as a whole Segment margin for one or both segments === Sunk costs are ALWAYS irrelevant in decision making.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern