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A Segment of an Organization Is Any Part of the Organization

Question 184

Essay

A segment of an organization is any part of the organization that management wishes to evaluate.Segment margin income statements highlight the elements under the segment manager's control.
Required:
a.What is "segment margin" and how is it calculated?
b.What is the difference between "segment margin" and a segment's "net operating income?"
c.Why are common allocated fixed costs an issue in evaluating the performance of a segment manager?

Correct Answer:

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a.The segment margin is the amount of op...

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