Chapter 20, Problem 20.15EX

Segment profitability analysis

The marketing segment sales for Caterpillar, Inc., for a year follow:

In addition assume the following information:

1. A. Use the sales information and the additional assumed information to prepare a contribution margin by segment report. Round to two decimal places. In addition, calculate the contribution margin ratio for each segment as a percentage, rounded to one decimal place.
2. B. Prepare a table showing the manufacturing margin, dealer commissions, and variable promotion expenses as a percent of sales for each segment. (Round whole percents to one decimal place.)
3. C. Use the information in (A) and (B) to interpret the segment performance.