Asked by Paola Zaragoza on May 02, 2024
Verified
All other things the same, if a division's traceable fixed expenses decrease then the division's segment margin will decrease.
Traceable Fixed Expenses
Fixed costs that can be directly associated with a specific business segment or operation.
Segment Margin
The amount of profit or loss generated by a particular segment of a business, after accounting for the direct costs and traceable fixed costs associated with that segment.
- Acquire insight into the notion of segment margin along with the approach to calculate it.
Verified Answer
TB
Thomas Beorgoh-LewisMay 06, 2024
Final Answer :
False
Explanation :
If the traceable fixed expenses decrease, it means the division's total fixed costs have decreased. Therefore, the division's contribution margin will increase as a result, leading to an increase in segment margin.
Learning Objectives
- Acquire insight into the notion of segment margin along with the approach to calculate it.