All other things equal,if a division's traceable fixed expenses decrease:
A)the division's segment margin will increase.
B)the overall company net operating income will decrease.
C)the division's contribution margin will increase.
D)the division's sales volume will increase.

Question

Quizplus · Accepted Answer

Traceable fixed expenses are expenses that are directly related to a particular segment/division. If these expenses decrease, it means that the division's costs have decreased, resulting in an increase in the division's segment margin. The overall company net operating income may or may not be affected by this change, depending on whether the decreased expenses are offset by other changes in the company's financial situation. The contribution margin and sales volume may also be affected, but these are not directly related to the decrease in traceable fixed expenses.

All Other Things Equal,if a Division's Traceable Fixed Expenses Decrease