Question

Max, inc., has two divisions, south division and north division. south division's sales, contribution margin ratio, and traceable fixed expenses are $500,000, 60%, and $100,000 respectively. what is the segment margin for the south division? $400,000 $300,000 $200,000 $100,000

Answer 1

The segment margin for the south division is $300,000 because this calculation takes the south division sales (500,000) multiplied by 60%, this equals $300,000. Traceable fixed expenses are not considered in this because that should already be calculated in the margin.