Assume the following information for a product line:
$\begin{array}{llr}
\text { Sales } &\$500,000\
\text {Variable manufacturing expenses } &100,000\
\text { Direct fixed manufacturing expenses} &75,000\
\text { Variable selling and administrative expenses} &50,000\
\text { Direct fixed selling and admin, expenses } &60,000\
\end{array}$

-Refer to the figure.What is the segment margin of the product line?
A)$215,000
B)$325,000
C)$350,000
D)$400,000

Question

Assume the following information for a product line:
$\begin{array}{llr}
  \text { Sales } &\$500,000\
 \text {Variable manufacturing expenses  } &100,000\
 \text {  Direct fixed manufacturing expenses} &75,000\
 \text {  Variable selling and administrative expenses} &50,000\
 \text { Direct fixed selling and admin, expenses } &60,000\
\end{array}$

-Refer to the figure.What is the segment margin of the product line?
A)$215,000
B)$325,000
C)$350,000
D)$400,000

Quizplus · Accepted Answer

The segment margin is calculated as Sales minus all variable expenses and direct fixed expenses. So, $500,000 - $100,000 - $50,000 - $75,000 - $60,000 = $215,000.

Assume the Following Information for a Product Line -Refer to the Figure