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    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

    $2.19

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