Homework Answers
Answer: $72,700
Following step should be followed:
Step 1: total segment margin = common fixed expenses + net operating income = 49,700 + 3,000 = 52,700
Step 2: total contribution margin = total segment margin + total traceable fixed costs = 52,700 + 180,000 = 232,700
Step 3: contribution margin of B = Sales – Variable expenses = 200,000 – 140,000 = 60,000
Step 4: contribution margin of A = total contribution margin – contribution margin of B = 232,700 – 60,000 = 172,700
Step 5: segment margin of A = contribution margin of A – traceable fixed expenses of A = 172,700 – 100,000 = 72,700
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