Segment analysis for a service company Charles Schwab Corporation (SCHW) is a large brokerage and wealth management company that operates in two segments: Investor Services and Advisor Services. In recent financial statements, Schwab reported the following (in millions): Revenues Operating income Depreciation Investor Services $8,608 3,079 288 Advisor Services $3,083 1,221 126 a. The Investor Services used by individual Investors. The Advitor Services mutual fund managers, insurance companies, and pension plan administrators. ✓segment serves the retail customer, you and me. These are the brokerage, Internet, and mutual fund services ✔segment includes the same services provided for financial institutions, such as banks, b. Indicate whether the following costs are a "Variable Cost" or 1. Commissions to brokers Variable Cost 2. Fees paid to exchanges for executing trades Variable Cost ✔ 3. Depreciation on brokerage offices Fixed Cost 4. Transaction fees incurred by Schwab mutual funds to purchase and sell shares Variable Cost 5. Property taxes on brokerage offices Fixed Cost a "Fixed Cost" in the "Investor Services" segment. ✓
Segment analysis for a service company Charles Schwab Corporation (SCHW) is a large brokerage and wealth management company that operates in two segments: Investor Services and Advisor Services. In recent financial statements, Schwab reported the following (in millions): Revenues Operating income Depreciation Investor Services $8,608 3,079 288 Advisor Services $3,083 1,221 126 a. The Investor Services used by individual Investors. The Advitor Services mutual fund managers, insurance companies, and pension plan administrators. ✓segment serves the retail customer, you and me. These are the brokerage, Internet, and mutual fund services ✔segment includes the same services provided for financial institutions, such as banks, b. Indicate whether the following costs are a "Variable Cost" or 1. Commissions to brokers Variable Cost 2. Fees paid to exchanges for executing trades Variable Cost ✔ 3. Depreciation on brokerage offices Fixed Cost 4. Transaction fees incurred by Schwab mutual funds to purchase and sell shares Variable Cost 5. Property taxes on brokerage offices Fixed Cost a "Fixed Cost" in the "Investor Services" segment. ✓
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter7: Receivables And Investments
Section: Chapter Questions
Problem 7.3AP
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