Assume a company with two divisions (A and B) prepared the following segmented income statement: AB Total Sales $? $200,000 $? Variable expenses 120,000 140,000 260,000 Contribution margin ? ? ? Traceable fixed expenses 100,000 80,000 180,000 Segment margin $? $(20,000) ? Common fixed expenses 50,000 Net operating income $10,000 What is Division A’s contribution margin? Multiple Choice $140,000 $180,000 $160,000 $200,000

Total Segment margin = Net operating income + Common fixed expenses = $10,000 + 50,000 = $60,000

Answered: Assume a company with two divisions (A…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9E: Contribution margin ratio Young Company budgets sales of 112,900,000, fixed costs of 25,000,000, and...

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Assume a company with two divisions (A and B) prepared the following segmented income statement:

	A	B		Total
Sales		$	?	$	200,000		$	?
Variable expenses			120,000		140,000			260,000
Contribution margin			?		?			?
Traceable fixed expenses			100,000		80,000			180,000
Segment margin		$	?	$	(20,000	)		?
Common fixed expenses								50,000
Net operating income							$	10,000

What is Division A’s contribution margin?

Multiple Choice

$140,000
$180,000
$160,000
$200,000

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