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Knowledge Check 01 Which of the following is a common mistake made by companies when assigning costs to segments? They use allocation bases that drive the costs when assigning costs to segments. They trace fixed expenses to segments when it is feasible to do so. They assign the costs of the corporate headquarters buildings to segments because the segments must cover those costs. They include "upstream" and "downstream" costs when preparing profitability analyses that relate to individual product costs.

Knowledge Check 01 Which of the following is a common mistake made by companies when assigning costs to segments? They use allocation bases that drive the costs when assigning costs to segments. They trace fixed expenses to segments when it is feasible to do so. They assign the costs of the corporate headquarters buildings to segments because the segments must cover those costs. They include "upstream" and "downstream" costs when preparing profitability analyses that relate to individual product costs.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Knowledge Check 01 Which of the following is common mistake made by companies when assigning costs to segments? They use allocation bases that drive the costs when assigning costs to segments. They trace fixed expenses to segments when it is feasible to do so. They assign the costs of the corporate headquarters buildings to segments because the segments must cover those costs. They include "upstream" and "downstream" costs when preparing profitability analyses that relate to individual product costs.
Transcribed Image Text:Knowledge Check 01 Which of the following is common mistake made by companies when assigning costs to segments? They use allocation bases that drive the costs when assigning costs to segments. They trace fixed expenses to segments when it is feasible to do so. They assign the costs of the corporate headquarters buildings to segments because the segments must cover those costs. They include "upstream" and "downstream" costs when preparing profitability analyses that relate to individual product costs.
Parcel Corporation Segment Income Statement Sales Variable expenses Contribution margin Traceable fixed expenses Division segment margin Common fixed expenses Net operating income $360,000 Ⓒ$440,000 Knowledge Check 01 What is the break-even point for the American Division? O $600,000 $1,210,549 Total Company Division $1,520,000 $720,000 288,000 448,000 1,072,000 712,000 360,000 141,800 $ 218, 200 American International Division $ 800,000 160,000 640,000 352,000 $ 288,000 432,000 360,000 $ 72,000
Transcribed Image Text:Parcel Corporation Segment Income Statement Sales Variable expenses Contribution margin Traceable fixed expenses Division segment margin Common fixed expenses Net operating income $360,000 Ⓒ$440,000 Knowledge Check 01 What is the break-even point for the American Division? O $600,000 $1,210,549 Total Company Division $1,520,000 $720,000 288,000 448,000 1,072,000 712,000 360,000 141,800 $ 218, 200 American International Division $ 800,000 160,000 640,000 352,000 $ 288,000 432,000 360,000 $ 72,000
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