Chapter 11 Pre-Class Notes

Chapter 11 Pre-Class Notes - 11-1MANAGERIAL...

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Unformatted text preview: 11-1MANAGERIAL ACCOUNTINGRSM222Reporting for ControlChapter 1111-2Decentralization and Segment ReportingAsegmentsegmentis any part or activity of an organization about which a manager seeks cost , ______ , ______, ______. A segment can be . . .Quick MartAn Individual StoreA Service CentreA Sales Territory11-3Keys to Segmented Income StatementsThere are two keys to building segmented income statements:A contribution format should be used because it separates ______ from ______ costs and it enables the calculation of a ______ ______ .______ fixed costs should be separated from ______ fixed costs to enable the calculation of a segment margin.11-4Identifying Traceable Fixed CostsTraceable costsarise because of the existence of a particular segment and would ______ over time if the segment itself disappeared.No computer No computer division means . . .division means . . .No No ______ ______ ______ ..11-5Identifying Common Fixed CostsCommon costsarise because of the ______ operation of the company and would not disappear if any particular segment were eliminated.No computer No computer division but . . .division but . . .We still have aWe still have a______ ______..11-6Traceable and Common CostsFixedCostsTraceableCommonThesegment margin, which is computed by subtracting the ______ fixed costs of a segment from its contribution margin, is the best gauge of the ______ profitability of a segment.11-7Segment Reporting for Financial AccountingThe Accounting Standards Boardnow requires that companies in Canada include segmented financial datain their annual reports.1.Companies must report segmented results to shareholders using the same methodsthat are used for internal segmented reports.2.Since the contribution approach to segment reporting does not comply with GAAP, it is likely that some managers will choose to construct their segmented financial statements using the absorption approach to comply with GAAP.11-8Cost, Profit, and Investments centresResponsibilitycentreResponsibilitycentre______centre______centre______centre______centre______centre______centreCost, profit,and investmentcentres areallknown asresponsibilitycentres.11-9Responsibility centres...
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This note was uploaded on 04/03/2012 for the course RSM 222 taught by Professor D.cianflone during the Spring '10 term at University of Toronto- Toronto.

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Chapter 11 Pre-Class Notes - 11-1MANAGERIAL...

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