Solution By Steps

Step 1: Understand the Concept of Common Fixed Costs

Common fixed costs are expenses that are not directly attributable to a specific segment but are shared across multiple segments of a company. These costs remain constant regardless of the level of production or sales.

Step 2: Impact on Segment Margin

When common fixed costs are assigned to segments, they reduce the segment margin. Segment margin is calculated as the segment’s revenue minus its variable costs and traceable fixed costs. Assigning common fixed costs to segments will decrease the segment margin because it increases the total costs allocated to the segment.

Step 3: Impact on Total Corporate Profit

Total corporate profit is the overall profit of the company after accounting for all revenues and expenses, including common fixed costs. Assigning common fixed costs to segments does not change the total amount of these costs; it merely reallocates them. Therefore, the total corporate profit remains unchanged.

Step 4: Conclusion

Assigning common fixed costs to segments impacts the segment margin but does not affect the total corporate profit.

Final Answer

Segment margin only