Segmented Income Statements Are Used to Show Revenues, Expenses, and Income

question 67

Essay

Segmented income statements are used to show revenues, expenses, and income for major parts of an organization.
Required:
A. Consider a regional chain of department stores that has two or three stores in each of several cities. One way to segment this business is geographically. Describe another way of segmenting the firm.
B. Segmented income statements often distinguish between "fixed expenses controllable by the segment manager" and "fixed expenses traceable to the segment, but controllable by others." Assume that the Cleveland district has three retail stores. Give two examples of each type of fixed cost.
C. Common costs create difficulties when preparing segmented income statements. Define "common costs," give an example for the regional chain of department stores, and explain in general terms why such costs create a problem.

Grasp the concept of the present and future value of money, including the principles of compounding and discounting.

Recognize the role of profits and losses in the allocation of society's resources.

Comprehend the basic principles of loan interest, including factors affecting interest rates and the relation between loan size and period.

Identify the characteristics of economic resources and differentiate between them (e.g., land, labor, capital).

---

Definitions:

Random Drift

A process in evolutionary biology in which allele frequencies within a population change due to chance rather than natural selection.

European Naturalists

Refers to scientists and scholars from Europe, especially from the 17th to the 19th centuries, who studied nature and contributed to the fields of botany, zoology, and geology.

Evolved

The process through which organisms undergo gradual changes in their genetic makeup over generations, often leading to new species.

System of Nature

A conceptual framework understanding the natural world and its phenomena, often encompassing ecological and biological processes.