Segment margin is equal to sales less
A) variable costs.
B) variable costs and direct fixed costs.
C) variable costs and indirect fixed costs.
D) cost of goods sold.

Question

Quizplus · Accepted Answer

Segment margin is the contribution margin of a specific product line or business segment after deducting direct fixed costs. Therefore, the segment margin is equal to sales less variable costs and direct fixed costs. Indirect fixed costs are not included in the segment margin calculation. Cost of goods sold represents the direct expenses incurred in producing the goods sold, and it is part of the variable cost calculation.

Segment Margin Is Equal to Sales Less