Ch. 6 exam review. Winona State University ACCT 212 .

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Ch. 6 Review Document TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 1) Segment margin is sales less variable expenses less traceable fixed expenses. 1) 2) All ot... her things the same, if a division's traceable fixed expenses decrease then the division's segment margin will decrease. 2) 3) The salary paid to a store manager is not a traceable fixed expense of the store. 3) 4) A company has two divisions, each selling several products. If segment reports are prepared for each product, the division managers' salaries should be considered as common fixed costs of the products. 4) 5) If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost should be considered a common cost. 5) 6) Segmented statements for internal use should not be prepared using the contribution format. 6) 7) Common fixed expenses should not be allocated to business segments when performing break-even calculations and making decisions. 7) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 8) Hayworth Corporation has just segmented last year's income statement into its ten product lines. The chief executive officer (CEO) is curious as to what effect dropping one of the product lines at the beginning of last year would have had on overall company profit. What is the best number for the CEO to look at to determine the effect of this elimination on the net operating income of the company as a whole? A) the product line's contribution margin B) the product line's segment margin minus an allocated portion of common fixed expenses C) the product line's sales dollars D) the product line's segment margin 8) 9) Higado Confectionery Corporation has a number of store locations throughout North America. In income statements segmented by store, which of the following would be considered a common fixed cost with respect to the stores? A) cost of goods sold at each store B) store building depreciation expense C) store manager salaries D) the cost of corporate advertising aired during the Super Bowl [Show More]

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