Homework Answers
Segment margin or Divisional margin is a measure of profitability to individual product segments. Segment margin is calculated by reducing segment variable cost and avoidable fixed cost from Segment Revenue. It is also used to make decision to continue or discontinue the product line.
When certain fixed costs which are not identifiable to individual segments are disclosed in consolidated Profitability statement only
The answer for above question
C. $135,200
Working :
South divisional margin - $45,100
Add : West divisional margin - $185,500
Total divisional margin - $230,600
Less : Total net operating income - $95,400
Untraceable common fixed expense - $135,200
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