Chapter 12 Garrison 13e

Segment Reporting and
Decentralization
Chapter Twelve
McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc.

12-2
Decentralization in Organizations
Benefits of
Top
Top management
management
Decentralization freed
freed to
to concentrate
concentrate
on
on strategy.
strategy.
Lower-level
Lower-level managers
managers
gain
gain experience
experience inin
decision-making.
decision-making. Decision-making
Decision-making
authority
authority leads
leads to
to
job
job satisfaction.
satisfaction.
Lower-level decisions
Lower-level decisions
often
often based
based on
on
better
better information.
information.
Lower
Lower level
level managers
managers
can
can respond
respond quickly
quickly
to
to customers.
customers.
12-3
Decentralization in Organizations
May
May be
be aa lack
lack of
of
coordination
coordination among
among
autonomous
autonomous
Lower-level
Lower-level managers
managers managers.
managers.
may
may make
make decisions
decisions
without
without seeing
seeing the
the
“big
“big picture.”
picture.”
Disadvantages of
Lower-level
Decentralization
Lower-level manager’s
manager’s
objectives
objectives may
may not
not
be
be those
those of
of the
the
organization.
organization. May
May bebe difficult
difficult to
to
spread
spread innovative
innovative ideas
ideas
in
in the
the organization.
organization.
12-4
Cost, Profit, and Investments Centers
Cost
Cost Profit
Profit Investment
Investment
Center
Center Center
Center Center
Center
Cost, profit,
and investment
centers are all Responsibility
Responsibility
known as Center
Center
responsibility
centers.
12-5
Cost Center
A segment whose
manager has control
over costs,
but not over revenues
or investment funds.

12-6
Profit Center
Revenues
A segment whose
Sales
manager has control Interest
over both costs and Other
revenues, Costs
but no control over Mfg. costs
investment funds. Commissions
Salaries
Other

12-7
Investment Center
Corporate Headquarters
A segment whose
manager has control
over costs, revenues,
and investments in
operating assets.

12-8
Responsibility Centers
Investment
Centers S u p e r io r F o o d s C o r p o r a tio n
C o rp o ra te H e a d q u a rte rs
P r e s id e n t a n d C E O
O p e r a tio n s F in a n c e Legal P e rs o n n e l
V ic e P r e s id e n t C h ie f F In a n c ia l O ffic e r G e n e ra l C o u n s e l V ic e P r e s id e n t
S a lty S n a c k s B e v e ra g e s C o n fe c tio n s
P ro d u c t M a n g e r P ro d u c t M a n a g er P ro d u c t M a n a g e r
B o ttlin g P la n t W a re h o u se D is tr ib u tio n
Cost
Centers
M anager M anager M anager
Superior Foods Corporation provides an example of the

various kinds of responsibility centers that exist in an
organization.
12-9
S u p e r io r F o o d s C o r p o r a tio n
Profit
Centers
organization.
12-10
Cost
Centers

organization.
12-11
Decentralization and
Segment Reporting
An Individual Store
Quick Mart
A segment is any part
or activity of an A Sales Territory
organization about
which a manager
seeks cost, revenue,
or profit data. A
A Service Center
segment can be . . .

12-12
Superior Foods: Geographic Regions
$ 5 0 0 , 0 0 0 ,0 0 0
E ast W est M id w e s t S o u th
$ 7 5 ,0 0 0 ,0 0 0 $ 3 0 0 ,0 0 0 ,0 0 0 $ 5 5 ,0 0 0 ,0 0 0 $ 7 0 ,0 0 0 ,0 0 0
O re g o n W a s h in g to n C a lif o r n ia M o u n t a in S t a t e s
$ 4 5 ,0 0 0 ,0 0 0 $ 5 0 ,0 0 0 ,0 0 0 $ 1 2 0 , 0 0 0 ,0 0 0 $ 8 5 ,0 0 0 ,0 0 0
Superior Foods Corporation could segment its business

by geographic regions.

12-13
Superior Foods: Customer Channel
S u p e rio r F o o d s C o r p o r a tio n
$ 5 0 0 , 0 0 0 ,0 0 0
C o n v e n ie n c e S to r e s S u p e r m a r k e t C h a in s W h o l e s a le D is t r ib u t o r s D ru g s to re s
$ 8 0 ,0 0 0 ,0 0 0 $ 2 8 0 , 0 0 0 ,0 0 0 $ 1 0 0 ,0 0 0 ,0 0 0 $ 4 0 ,0 0 0 ,0 0 0
S u p e r m a r k e t C h a in A S u p e r m a r k e t C h a in B S u p e r m a r k e t C h a in C S u p e r m a r k e t C h a in D
$ 8 5 ,0 0 0 ,0 0 0 $ 6 5 ,0 0 0 ,0 0 0 $ 9 0 ,0 0 0 ,0 0 0 $ 4 0 ,0 0 0 ,0 0 0
Superior Foods Corporation could segment its business

by customer channel.

12-14
Keys to Segmented Income Statements
There are two keys to building

segmented income statements:
A contribution format should be used

because it separates fixed from variable costs
and it enables the calculation of a
contribution margin.
Traceable fixed costs should be separated

from common fixed costs to enable the
calculation of a segment margin.

12-15
Identifying Traceable Fixed Costs
Traceable costs arise because of the existence

of a particular segment and would disappear
over time if the segment itself disappeared.
No computer No computer
division means . . . division manager.

12-16
Identifying Common Fixed Costs
Common costs arise because of the overall

operation of the company and would not
disappear if any particular segment were
eliminated.
No computer We still have a

division but . . . company president.

12-17
Traceable Costs Can Become
Common Costs
It is important to realize that the traceable

fixed costs of one segment may be a
common fixed cost of another segment.
For example, the landing fee

paid to land an airplane at an
airport is traceable to the
particular flight, but it is not
traceable to first-class,
business-class, and
economy-class passengers.
12-18
Segment Margin
The segment margin, which is computed by

subtracting the traceable fixed costs of a segment
from its contribution margin, is the best gauge of
the long-run profitability of a segment.
Profits
Time
12-19
Traceable and Common Costs
Fixed Don’t allocate

Costs common costs to
segments.
Traceable Common

12-20
Activity-Based Costing
Activity-based costing can help identify how costs

shared by more than one segment are traceable to
individual segments.
Assume that three products, 9-inch, 12-inch, and 18-inch pipe, share 10,000
square feet of warehousing space, which is leased at a price of $4 per square
foot.
If the 9-inch, 12-inch, and 18-inch pipes occupy 1,000, 4,000, and 5,000 square
feet, respectively, then ABC can be used to trace the warehousing costs to the
three products as shown.
Pipe Products
9-inch 12-inch 18-inch Total
Warehouse sq. ft. 1,000 4,000 5,000 10,000
Lease price per sq. ft. $ 4 $ 4 $ 4 $ 4
Total lease cost $ 4,000 $ 16,000 $ 20,000 $ 40,000

12-21
Levels of Segmented Statements
Webber, Inc. has two divisions.
W e b b e r , In c .
C o m p u te r D iv is io n T e le v is io n D iv is io n
Let’s
Let’s look
look more
more closely
closely at
at the
the Television
Television
Division’s
Division’s income
income statement.
statement.

12-22
Our approach to segment reporting uses the

contribution format.
Income Statement Cost
Cost of
of goods
goods
Contribution Margin Format sold
sold consists
consists of
of
Television Division variable
variable
Sales $ 300,000 manufacturing
manufacturing
Variable COGS 120,000 costs.
costs.
Other variable costs 30,000
Fixed
Fixed and
and
Total variable costs 150,000
variable
variable costs
costs
Contribution margin 150,000
are
are listed
listed in
in
Traceable fixed costs 90,000
separate
separate
Division margin $ 60,000
sections.
sections.
12-23
Our approach to segment reporting uses the

contribution format.
Income Statement
Contribution Margin Format Contribution
Contribution margin
margin
Television Division is
is computed
computed byby
Sales $ 300,000 taking
taking sales
sales minus
minus
Variable COGS 120,000 variable
variable costs.
costs.
Other variable costs 30,000
Total variable costs 150,000
Segment
Segment margin
margin
Contribution margin 150,000
is
is Television’s
Television’s
Traceable fixed costs 90,000
contribution
contribution
Division margin $ 60,000
to
to profits.
profits.
12-24
Income Statement
Company Television Computer
Sales $ 500,000 $ 300,000 $ 200,000
Variable costs 230,000 150,000 80,000
CM 270,000 150,000 120,000
Traceable FC 170,000 90,000 80,000
Division margin 100,000 $ 60,000 $ 40,000
Common costs
Net operating
income

12-25
Income Statement
Company Television Computer
Sales $ 500,000 $ 300,000 $ 200,000
Variable costs 230,000 150,000 80,000
CM 270,000 150,000 120,000
Traceable FC 170,000 90,000 80,000
Division margin 100,000 $ 60,000 $ 40,000
Common costs 25,000
Common
Common costs
costs should
should notnot
Net operating
be
be allocated
allocated to
to the
the
income $ 75,000 divisions.
divisions. These
These costs
costs
would
would remain
remain even
even ifif one
one
of
of the
the divisions
divisions were
were
eliminated.
eliminated.
12-26
Common Costs
As previously mentioned, fixed costs that

are traceable to one segment can become
common if the company is divided into
smaller segments.
Let’s see how this works

using the Webber, Inc.
example!

12-27
Common Costs
Webber’s Television Division

Television
Division
Regular Big Screen
Product
Lines
12-28
Common Costs
Income Statement
Television
Division Regular Big Screen
Sales $ 200,000 $ 100,000
Variable costs 95,000 55,000
CM 105,000 45,000
Traceable FC 45,000 35,000
Product line margin $ 60,000 $ 10,000
Common costs
Divisional margin
We obtained the following information from

the Regular and Big Screen segments.
12-29
Common Costs
Income Statement
Television
Division Regular Big Screen
Sales $ 300,000 $ 200,000 $ 100,000
Variable costs 150,000 95,000 55,000
CM 150,000 105,000 45,000
Traceable FC 80,000 45,000 35,000
Product line margin 70,000 $ 60,000 $ 10,000
Common costs 10,000
Divisional margin $ 60,000
Fixed
Fixed costs
costs directly
directly traced
traced
to
to the
the Television
Television Division
Division
$80,000
$80,000 ++ $10,000
$10,000 == $90,000
$90,000

12-30
External Reports
The Financial Accounting Standards Board now requires

that companies in the United States include segmented
financial data in their annual reports.
1. Companies must report segmented

results to shareholders using the same
methods that are used for internal
segmented reports.
2. Since the contribution approach to
segment reporting does not comply
with GAAP, it is likely that some
managers will choose to construct
their segmented financial statements
using the absorption approach to
comply with GAAP.

12-31
Omission of Costs
Costs assigned to a segment should include all

costs attributable to that segment from the
company’s entire value chain.
chain
Business Functions
Making Up The
Value Chain
Product Customer
R&D Design Manufacturing Marketing Distribution Service

Inappropriate Methods of Allocating Costs
12-32
Among Segments
Failure to trace
costs directly Inappropriate
allocation base
Segment Segment Segment Segment

1 2 3 4

12-33
Common Costs and Segments
Common costs should not be arbitrarily allocated to segments

based on the rationale that “someone has to cover the
common costs” for two reasons:
1. This practice may make a profitable business segment appear
to be unprofitable.
2. Allocating common fixed costs forces managers to be held

accountable for costs they cannot control.
Segment Segment Segment Segment

1 2 3 4

12-34
Quick Check 
Income Statement
Haglund's
Lakeshore Bar Restaurant
Sales $ 800,000 $ 100,000 $ 700,000
Variable costs 310,000 60,000 250,000
CM 490,000 40,000 450,000
Traceable FC 246,000 26,000 220,000
Segment margin 244,000 $ 14,000 $ 230,000
Common costs 200,000
Profit $ 44,000
Assume that Hoagland's Lakeshore prepared its

segmented income statement as shown.
12-35
Quick Check 
How much of the common fixed cost of $200,000

can be avoided by eliminating the bar?
a. None of it.
b. Some of it.
c. All of it.

12-36
Quick Check 
How much of the common fixed cost of $200,000

can be avoided by eliminating the bar?
a. None of it.
b. Some of it.
c. All of it.
A common fixed cost cannot be

eliminated by dropping one of
the segments.

12-37
Quick Check 
Suppose square feet is used as the basis for

allocating the common fixed cost of $200,000. How
much would be allocated to the bar if the bar
occupies 1,000 square feet and the restaurant
9,000 square feet?
a. $20,000
b. $30,000
c. $40,000
d. $50,000

12-38
Quick Check 
Suppose square feet is used as the basis for

allocating the common fixed cost of $200,000. How
much would be allocated to the bar if the bar
occupies 1,000 square feet and the restaurant
9,000 square feet?
a. $20,000
The bar would be
b. $30,000
allocated 1/10 of the cost
c. $40,000 or $20,000.
d. $50,000

12-39
Quick Check 
If Hoagland's allocates its common

costs to the bar and the restaurant,
what would be the reported profit of
each segment?

12-40
Allocations of Common Costs
Income Statement
Haglund's
Sales $ 800,000 $ 100,000 $ 700,000
Variable costs 310,000 60,000 250,000
CM 490,000 40,000 450,000
Traceable FC 246,000 26,000 220,000
Segment margin 244,000 14,000 230,000
Common costs 200,000 20,000 180,000
Profit $ 44,000 $ (6,000) $ 50,000
Hurray, now everything adds up!!!

12-41
Quick Check 
Should the bar be eliminated?

a. Yes
b. No

12-42
Quick Check 
Should the bar be eliminated?

a. Yes
b. No The profit was $44,000 before
eliminating the bar. If we eliminate
the bar,
Income profit drops to $30,000!
Statement
Haglund's
Sales $ 700,000 $ 700,000
Variable costs 250,000 250,000
CM 450,000 450,000
Traceable FC 220,000 220,000
Segment margin 230,000 230,000
Common costs 200,000 200,000
Profit $ 30,000 $ 30,000

12-43
Return on Investment (ROI) Formula
Income
Incomebefore
before interest
interest
and
andtaxes
taxes(EBIT)
(EBIT)
Net operating income

ROI =
Average operating assets
Cash,
Cash,accounts
accountsreceivable,
receivable,inventory,
inventory,
plant
plantand
andequipment,
equipment, and
andother
other
productive
productiveassets.
assets.
12-44
Net Book Value vs. Gross Cost
Most companies use the net book value of

depreciable assets to calculate average
operating assets.
Acquisition cost
Less: Accumulated depreciation
Net book value

12-45
Understanding ROI

ROI =
Average operating assets
Margin =
Sales
Sales
Turnover =
Average operating
assets
ROI =Margin × Turnover
12-46
Increasing ROI
There are three ways to increase ROI . . .

Reduce
Expenses
Increase Reduce
Sales Assets

12-47
Increasing ROI – An Example
Regal Company reports the following:

Net operating income $ 30,000
Average operating assets $ 200,000
Sales $ 500,000
Operating expenses $ 470,000
What is Regal Company’s ROI?
Net operating income Sales
ROI =
Sales
× Average operating assets
12-48
Increasing ROI – An Example

ROI =
Sales
ROI = $30,000 ×
$500,000
$500,000 $200,000
ROI =6% × 2.5 = 15%

12-49
Increasing Sales Without an Increase in Operating
Assets
• Regale's manager was able to increase sales to

$600,000, while operating expenses increased to
$558,000.
• Regale's net operating income increased to $42,000.
• There was no change in the average operating assets

of the segment.
Let’s calculate the new ROI.

12-50
Increasing Sales Without an Increase in Operating Assets

ROI =
Sales
ROI = $42,000 ×
$600,000
$600,000 $200,000
ROI =7% × 3.0 = 21%
ROI
ROI increased
increased from
from 15%
15% to
to 21%.
21%.

12-51
Decreasing Operating Expenses with no Change in Sales or
Operating Assets
Assume that Regale's manager was able to

reduce operating expenses by $10,000, without
affecting sales or operating assets. This would
increase net operating income to $40,000.
Sales $ 500,000
12-52
Decreasing Operating Expenses with no Change in Sales or
Operating Assets

ROI =
Sales
ROI = $40,000 ×
$500,000
$500,000 $200,000
ROI =8% × 2.5 = 20%
ROI
ROI increased
increased from
from 15%
15% to
to 20%.
20%.

12-53
Decreasing Operating Assets with no
Change in Sales or Operating Expenses
Assume that Regale's manager was able to

reduce inventories by $20,000 using just-in-time
techniques, without affecting sales or operating
expenses.
Sales $ 500,000
12-54
Decreasing Operating Assets with no
Change in Sales or Operating Expenses

ROI =
Sales
ROI = $30,000 ×
$500,000
$500,000 $180,000
ROI =6% × 2.78 = 16.7%
ROI
ROI increased
increased from
from 15%
15% to
to 16.7%.
16.7%.

Investing in Operating Assets to Increase
12-55
Sales
Assume that Regale's manager invests in a

$30,000 piece of equipment that increases
sales by $35,000, while increasing operating
expenses by $15,000.
Sales $ 535,000
Investing in Operating Assets to Increase
12-56
Sales

ROI =
Sales
ROI = $50,000 ×
$535,000
$535,000 $230,000
ROI =9.35% × 2.33 = 21.8%
ROI
ROI increased
increased from
from 15%
15% to
to 21.8%.
21.8%.

12-57
ROI and the Balanced Scorecard
It may not be obvious to managers how to increase

sales, decrease costs, and decrease investments in a
way that is consistent with the company’s strategy. A
well constructed balanced scorecard can provide
managers with a road map that indicates how the
company intends to increase ROI.
Which internal business

process should be
improved?
Which customers should
be targeted and how will
they be attracted and
retained at a profit?

12-58
Criticisms of ROI
In the absence of the balanced

scorecard, management may
not know how to increase ROI.
Managers often inherit many

committed costs over which
they have no control.
Managers evaluated on ROI

may reject profitable
investment opportunities.

12-59
Residual Income - Another Measure of
Performance

above some minimum
return on operating
assets

12-60
Calculating Residual Income
Net Average Minimum

Residual
income
= operating -
income
(
operating
assets
× required rate of
return
)
This computation differs from ROI.
ROI measures net operating income earned relative
to the investment in average operating assets.
Residual income measures net operating income
earned less the minimum required return on average
operating assets.
12-61
Residual Income – An Example
•• The
The Retail
Retail Division
Division of
of Zephyr,
Zephyr, Inc.
Inc. has
has
average
average operating
operating assets
assets ofof $100,000
$100,000
and
and isis required
required to
to earn
earn aa return
return of
of
20%
20% on on these
these assets.
assets.
•• In
In the
the current
current period,
period, the
the division
division
earns
earns $30,000.
$30,000.
Let’s calculate residual income.

12-62
Residual Income – An Example
Operating assets $ 100,000

Required rate of return × 20%
Minimum required return $ 20,000
Actual income $ 30,000

Minimum required return (20,000)
Residual income $ 10,000

12-63
Motivation and Residual Income
Residual income encourages managers to

make profitable investments that would
be rejected by managers using ROI.

12-64
Quick Check 
Redmond Awnings, a division of Wrap-up

Corp., has a net operating income of
$60,000 and average operating assets of
$300,000. The required rate of return for the
company is 15%. What is the division’s ROI?
a. 25%
b. 5%
c. 15%
d. 20%
12-65
Quick Check 

company is 15%. What is the division’s ROI?
a. 25%
b. 5% ROI = NOI/Average operating assets
c. 15% = $60,000/$300,000 = 20%
d. 20%
12-66
Quick Check 
Redmond Awnings, a division of Wrap-up Corp.,

has a net operating income of $60,000 and
average operating assets of $300,000. If the
manager of the division is evaluated based on
ROI, will she want to make an investment of
$100,000 that would generate additional net
operating income of $18,000 per year?
a. Yes
b. No

12-67
Quick Check 
Redmond Awnings, a division of Wrap-up Corp.,

has a net operating income of $60,000 and
average operating assets of $300,000. If the
manager of the division is evaluated based on
ROI, will she want to make an investment of
$100,000 that would generate additional net
operating income of $18,000 per year?
a. Yes ROI = $78,000/$400,000 = 19.5%
b. No
This lowers the division’s ROI from
20.0% down to 19.5%.

12-68
Quick Check 
The company’s required rate of return is 15%.

Would the company want the manager of the
Redmond Awnings division to make an
investment of $100,000 that would generate
additional net operating income of $18,000 per
year?
a. Yes
b. No

12-69
Quick Check 
The company’s required rate of return is 15%.

Would the company want the manager of the
Redmond Awnings division to make an
investment of $100,000 that would generate
additional net operating income of $18,000 per
year?
a. Yes ROI = $18,000/$100,000 = 18%
b. No The return on the investment
exceeds the minimum required rate
of return.

12-70
Quick Check 

company is 15%. What is the division’s
residual income?
a. $240,000
b. $ 45,000
c. $ 15,000
d. $ 51,000
12-71
Quick Check 

company is 15%. What is the division’s
residual income?
a. $240,000
Net operating income $60,000
b. $ 45,000 Required return (15% of $300,000) (45,000)
Residual income $15,000
c. $ 15,000
d. $ 51,000
12-72
Quick Check 
If the manager of the Redmond Awnings

division is evaluated based on residual income,
will she want to make an investment of $100,000
that would generate additional net operating
income of $18,000 per year?
a. Yes
b. No

12-73
Quick Check 
If the manager of the Redmond Awnings

division is evaluated based on residual income,
will she want to make an investment of $100,000
that would generate additional net operating
income of $18,000 per year?
a. Yes
b. No Net operating income $78,000
Required return (15% of $400,000) (60,000)
Residual income $18,000
Yields an increase of $3,000 in the residual income.

12-74
Divisional Comparisons and Residual
Income
The residual
income approach
has one major
disadvantage.
It cannot be used to
compare
performance of
divisions of
different sizes.

12-75
Zephyr, Inc. - Continued
Recall the following Assume the following

information for the Retail information for the Wholesale
Division of Zephyr, Inc. Division of Zephyr, Inc.
Retail Wholesale
Operating assets $ 100,000 $ 1,000,000
Required rate of return × 20% 20%
Minimum required return $ 20,000 $ 200,000
Retail Wholesale
Actual income $ 30,000 $ 220,000
Minimum required return (20,000) (200,000)
Residual income $ 10,000 $ 20,000

12-76
Zephyr, Inc. - Continued
The residual income numbers suggest that the Wholesale Division outperformed
the Retail Division because its residual income is $10,000 higher. However, the
Retail Division earned an ROI of 30% compared to an ROI of 22% for the
Wholesale Division. The Wholesale Division’s residual income is larger than the
Retail Division simply because it is a bigger division.
Retail Wholesale
Operating assets $ 100,000 $ 1,000,000
Required rate of return × 20% 20%
Minimum required return $ 20,000 $ 200,000
Retail Wholesale
Actual income $ 30,000 $ 220,000
Minimum required return (20,000) (200,000)
Residual income $ 10,000 $ 20,000

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Chapter 12 Garrison 13e

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Segment Reporting and

McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc.

Cost, Profit, and Investments Centers

McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc.

McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc.

McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc.

Superior Foods Corporation provides an example of the

Superior Foods Corporation provides an example of the

McGraw-Hill/Irwin Copyright © 2008, The McGraw-Hill Companies, Inc.

Superior Foods: Geographic Regions

Superior Foods Corporation could segment its business

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Superior Foods: Customer Channel

Superior Foods Corporation could segment its business

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Keys to Segmented Income Statements

There are two keys to building

A contribution format should be used

Traceable fixed costs should be separated

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Identifying Traceable Fixed Costs

Traceable costs arise because of the existence

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Identifying Common Fixed Costs

Common costs arise because of the overall

No computer We still have a

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It is important to realize that the traceable

For example, the landing fee

The segment margin, which is computed by

Traceable and Common Costs

Fixed Don’t allocate

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Activity-based costing can help identify how costs

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Levels of Segmented Statements

Webber, Inc. has two divisions.

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Levels of Segmented Statements

Our approach to segment reporting uses the

Levels of Segmented Statements

Our approach to segment reporting uses the

Levels of Segmented Statements

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Levels of Segmented Statements

As previously mentioned, fixed costs that

Let’s see how this works

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Webber’s Television Division

Regular Big Screen

We obtained the following information from

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The Financial Accounting Standards Board now requires

1. Companies must report segmented

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Costs assigned to a segment should include all

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Segment Segment Segment Segment

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Common Costs and Segments

Common costs should not be arbitrarily allocated to segments

2. Allocating common fixed costs forces managers to be held

Segment Segment Segment Segment

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