Fedex 10-K

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Managerial Accounting

Page. 466
Research and Application 11-30

Questions: 1-6

1. After reading the section Strategy in the 10-K I am informed that FedEx’s strategy for success in the market place holds mainly within operational excellence. They excel to provide all of their many different kinds of services to their consumers with ease and convenience. IE. FedEx Express, FedEx Ground and FedEx Freight shipment tracking, customer service and invoicing information, FedEx Kinko’s office and print services, etc. 2. A.

FedEx Express
Traceable Fixed Costs (2)
1. U.S. Overnight Box
2. U.S. Overnight Envelope
FedEx Ground
Traceable Fixed Costs (2)
1. FedEx Ground Vehicles
2. FedEx Ground Drivers
FedEx Freight
Traceable Fixed Costs (2)
1. FedEx Freight Vehicles
2. Overnight Truck Drivers
FedEx Kinko’s
Traceable Fixed Costs (2)
1. Other Operating Expenses: Paper
2. Other Operating Expenses: Toner / Supplies
Common Costs that are not traceable to the four business segments (2) 1. Sponsored Events by the company NOT through individual branches. 2. Salary of CEO
Cost Center – FedEx Express has a primary sorting facility in Memphis, Tennessee Profit Center – FedEx Kinko’s Offices and Printing / Copying Centers would be known as Profit Centers.
Investment Center – All four of the main business segments of FedEx would be also known as Investment Centers.

Fixed Costs that can be traceable or common depending on how FedEx defines its business segments (3 Examples) 1. Cost of operating a sorting and handling facilities
2. Salary of FedEx Express’s CEO
3. Salary of Executive VP traceable
5. Compute Margin, Turnover, and Return on investment (ROI) in 2005

Dollars in Millions| FedEx Express| FedEx Ground| FedEx Freight| FedEx Kinko’s| Margin| 7.3%| 12.9%| 11.0%| 4.8%|
Turnover| 1.52| 1.86| 1.62| 0.70|
ROI| 11.1%| 24.0%| 17.8%| 3.4%|

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