Chapter 4

Question 1

Segments

Answer 1

very important in managerial accounting

Question 2

Traceable FC

Answer 2

FC that we incurred because of the existence of the segment

If the segment did not exist that FC would not be incurred and if it were eliminated the FC would also be eliminated

Question 3

Common FC

Answer 3

FC that support the operations of more than one segment but they are not traceable in whole or in part to any one segment

If the segment were eliminated there would be no change in this type of FC

Question 4

Major decisions

Answer 4

SM is most useful

Question 5

Segment Margin

Answer 5

Difference between a segments CM and its traceable FC

Best gauge of the long-run profitability of a segment because it only includes the costs that are caused by the segment