Segment margin: Segment margin is the profit earned by a segment from its revenue after subtracting the segment costs. Net operating income: Net operating income is the net income of the organization from all its segments and divisions after subtracting the segment and common costs. To indicate: The reason evaluating profit center managers based on segment margin instead of net operating income.

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Answer 1

Question

Chapter 10, Problem 6Q

To determine

Concept introduction:

Segment margin:

Segment margin is the profit earned by a segment from its revenue after subtracting the segment costs.

Net operating income:

Net operating income is the net income of the organization from all its segments and divisions after subtracting the segment and common costs.

To indicate:

The reason evaluating profit center managers based on segment margin instead of net operating income.

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Answer 2

Question

Chapter 10, Problem 6Q

To determine

Concept introduction:

Segment margin:

Segment margin is the profit earned by a segment from its revenue after subtracting the segment costs.

Net operating income:

Net operating income is the net income of the organization from all its segments and divisions after subtracting the segment and common costs.

To indicate:

The reason evaluating profit center managers based on segment margin instead of net operating income.

Expert Solution & Answer

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Answer 3

Question

Chapter 10, Problem 6Q

To determine

Concept introduction:

Segment margin:

Segment margin is the profit earned by a segment from its revenue after subtracting the segment costs.

Net operating income:

Net operating income is the net income of the organization from all its segments and divisions after subtracting the segment and common costs.

To indicate:

The reason evaluating profit center managers based on segment margin instead of net operating income.

Expert Solution & Answer

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Answer 4

Question

Chapter 10, Problem 6Q

To determine

Concept introduction:

Segment margin:

Segment margin is the profit earned by a segment from its revenue after subtracting the segment costs.

Net operating income:

Net operating income is the net income of the organization from all its segments and divisions after subtracting the segment and common costs.

To indicate:

The reason evaluating profit center managers based on segment margin instead of net operating income.

Expert Solution & Answer

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Answer 5

Chapter 10, Problem 6Q

To determine

Concept introduction:

Segment margin:

Segment margin is the profit earned by a segment from its revenue after subtracting the segment costs.

Net operating income:

Net operating income is the net income of the organization from all its segments and divisions after subtracting the segment and common costs.

To indicate:

The reason evaluating profit center managers based on segment margin instead of net operating income.

Answer 6

Chapter 10, Problem 6Q

To determine

Concept introduction:

Segment margin:

Segment margin is the profit earned by a segment from its revenue after subtracting the segment costs.

Net operating income:

Net operating income is the net income of the organization from all its segments and divisions after subtracting the segment and common costs.

To indicate:

The reason evaluating profit center managers based on segment margin instead of net operating income.

Answer 7

Chapter 10, Problem 6Q

To determine

Concept introduction:

Segment margin:

Segment margin is the profit earned by a segment from its revenue after subtracting the segment costs.

Net operating income:

Net operating income is the net income of the organization from all its segments and divisions after subtracting the segment and common costs.

To indicate:

The reason evaluating profit center managers based on segment margin instead of net operating income.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 10 - Explain how centralized and decentralized...Ch. 10 - Why does decentralization create the need for...Ch. 10 - What is the controllability principle and why is...Ch. 10 - Prob. 4Q Ch. 10 - Prob. 5Q Ch. 10 - Prob. 6Q Ch. 10 - Prob. 7Q Ch. 10 - Prob. 8Q Ch. 10 - Return on investment may be separated into two...Ch. 10 - Prob. 10Q

Solution Summary: The author explains segment margin is the profit earned by a segment from its revenue after subtracting the segment costs, while net operating income is net income of the organization from all its segments and divisions. Profit center managers are evaluated on segment

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