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    Solve: Segment Margin

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    Please help with the following problem. Provide a simple solution for each.

    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 $681,000
    Sales revenues, Commercial $300,000
    Variable expenses, Consumer $384,000
    Variable expenses, Commercial $133,000
    Traceable fixed expenses, Consumer $100,000
    Traceable fixed expenses, Commercial $35,000

    In addition, common fixed expenses totaled $179,000 and were allocated as follows: $104,000 to the Consumer business segment and $75,000 to the Commercial business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:

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    Solution Summary

    This posting helps solve a segment margin. In a very brief, but concise response, this solution provides the simple equation which is required to calculate the segment margin.