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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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What is the difference between contribution margin and segment margin?

To determine

State the differences between contribution margin and segment margin.

Explanation

Contribution Margin and Segment Margin:

Contribution margin can be defined as the amount obtained after deducting variable expenses from sales revenue. It means the amount of sales left over after covering the variable expenses. The segment margin is the amount of profit contributed by each segment to cover the common fixed cost of a firm.

The differences between the contribution margin and segment margin:

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