CS计算机代考程序代写 flex Segment Reporting

Segment Reporting

– breaking income statement down by segment

– flexible

– any part of company for which profit data is desired

(i.e., geographic region, product line, stores, districts)

Assigning costs to segments

1. variable costs of the segment should be charged to the segment

2. fixed costs – traceable and common

a. traceable fixed costs (those fixed costs that would be eliminated

if the segment were eliminated) — charged to the segment

b. common fixed costs (caused by more than one segment and

would not be eliminated if the segment were eliminated) —

should not be charged to the segment

Contribution margin is calculated for each segment Sales

= segment sales – segment variable expenses -VE

– useful in ST decisions like utilization of capacity and special orders CM

Segment margin is calculated for each segment Sales

= segment CM – traceable fixed expenses -VE

– useful in LT decisions like capacity changes and pricing CM

– best guage of LT profitability -Traceable FE

SM

Traceable fixed expenses can become common fixed expenses

– as company is divided into smaller segments, traceable FEs of one segment can become

common FE of further segmented statement

Chapter 6 – Segment Reporting
ACCO 1031 – Melis