ACCT 2230 Chapter 11: ACCT Chapter 11
22 Nov 2016
School
Department
Course
Professor
Document Summary
Decentralized organization: an organization in which decision making is spread throughout the organization rather than being con ned to a few top executives. Decentralization and segment reporting: effective decentralization requires segment reporting, segment a part or activity of an organization about which managers would like cost, revenue or pro t data. Guidelines to assigning costs to various segments: according to cost behaviour patterns (ie. xed vs. variable, according to whether the costs are directly traceable to segments involved. Importance of fixed costs: cm is really useful here, contribution approach implies that different costs are needed for different approaches, by breaking apart fc and vc, we emphasize that costs are controlled differently. Traceable fixed costs: xed costs the can be identi ed with a particular segment and that arise because of the existence of the segment: only these are charged to particular segments. Breakdown of traceable fixed costs: some managers like to break them down into discretionary and committed costs.
