
(a)
Contribution Margin
Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.
To Determine: The contribution margin and contribution margin ratio for each segment of Incorporation TW.
(b)
To Describe: The contribution margin ratio for the publishing department is smaller than compared to the other segments.
(c)
To Identify: Does your answer to (b) mean that the other segments are more profitable businesses than the publishing department.

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Chapter 20 Solutions
Working Papers, Volume 1, Chapters 1-15 for Warren/Reeve/Duchac's Corporate Financial Accounting, 13th + Financial & Managerial Accounting, 13th
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