Contribution margin of segment
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Question 17: (2 points)
Ferrar Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for March appear below:
Sales revenues, Consumer $695,000
Sales revenues, Commercial $292,000
Variable expenses, Consumer $392,000
Variable expenses, Commercial $131,000
Traceable fixed expenses, Consumer $82,000
Traceable fixed expenses, Commercial $42,000
In addition, common fixed expenses totaled $180,000 and were allocated as follows: $105,000 to the Consumer business segment and $75,000 to the Commercial business segment.
The contribution margin of the Commercial business segment is:
$152,000
$161,000
$163,000
$165,000
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Solution Summary
The solution explains how to calculate the contribution margin of a segment
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