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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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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