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 49,700 Net operating income $3,000 What is Division A’s segment margin?

Segment margin of A can be calculated by deducting segment margin of B from total margin.

Answered: Assume a company with two divisions (A…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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								49,700
Net operating income							$	3,000

What is Division A’s segment margin?

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