Reconciling segmental data to consolidated statements and analysis of data. Raymack Manufacturing, headquartered in Michigan, is a manufacturer of equipment component parts used in a number of...

Reconciling segmental data to consolidated statements and analysis of data. Raymack Manufacturing, headquartered in Michigan, is a manufacturer of equipment component parts used in a number of industries. The company’s financial statements and related footnotes contain the required segment reporting. The financial statements are being analyzed by a bank lending officer to whom you report. The officer has asked you to respond to each of the following questions regarding segment reporting with a brief memo.

1. Two of Raymack’s reportable segments deal with components for fluid movement machinery. One of the segments designs and installs manufactured components, and the other segment inspects, maintains, and repairs the installed components. Why might these activities constitute two separate operating segments, when in fact they both have to do with components for fluid movement machinery?