The Difference Between the Profit Margin Controllable by a Segment

question 59

Multiple Choice

The difference between the profit margin controllable by a segment manager and the segment profit margin is caused by:

• A) variable operating expenses.
• B) allocated common expenses.
• C) fixed expenses controllable by the segment manager.
• D) fixed expenses traceable to the segment but controllable by others.
• E) sales revenue.

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Definitions:

Financing Activities

Transactions and events that affect long-term liabilities and equity of a company, reflected in the cash flows from financing section of the cash flow statement.

Operating Activities

Activities that are directly related to the day-to-day operations of a company, including sales and expenses.

Net Working Capital

The disparity between an organization's immediate assets and its short-term obligations.

Marketable Securities

Liquid financial instruments that can be quickly converted into cash at their fair market value.