Relative to making a segment profitability (keep-or-drop) decision, explain which costs are avoidable costs and which costs are unavoidable
A segment margin is a segment's sales revenue minus its direct costs (direct variable costs and direct fixed costs traceable to the segment). Such costs are assumed to be avoidable costs, since they would be eliminated if management were to drop the segment. Certain common costs will be incurred regardless of the decision. Those are unavoidable costs, and the remaining segments must have sufficient contribution margin to cover their own direct costs and the common costs.
You might also like to view...
The prices of a product are determined by the global supply and demand
Indicate whether the statement is true or false
Negative self-talk can do which of the following to an individual’s engagement in fitness goals?
a. Reduce energy and increase happiness b. Reduce self-confidence and increase happiness c. Reduce happiness d. Reduce energy and self-confidence
In a perpetual inventory system, merchandise returned to vendors reduces the merchandise inventory account
Indicate whether the statement is true or false
Business leaders, like automaker Henry Ford, developed these programs to support the recreational and health needs of their employees.
A. Corporate citizenship programs. B. Social networking programs. C. Paternalistic programs. D. Corporate social responsibility programs.