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.

Question

Quizplus · Accepted Answer

The difference arises because the segment profit margin includes all costs traceable to the segment, including fixed expenses traceable to the segment but controllable by others, which the segment manager cannot control.

The Difference Between the Profit Margin Controllable by a Segment