More Company has two divisions: L and M.During July,the contribution margin in Division L was $60,000.The contribution margin ratio in Division M was 40%,and its sales were $250,000.Division M's segment margin was $60,000.The common fixed expenses were $50,000,and the company operating income was $20,000.What was the segment margin for Division L?
A) $0.
B) $10,000.
C) $50,000.
D) $60,000.

Question

Quizplus · Accepted Answer

The segment margin for Division L can be calculated by first determining the total segment margin for both divisions combined, then subtracting Division M's segment margin. The total segment margin is the company's operating income plus the common fixed expenses ($20,000 + $50,000 = $70,000). Since Division M's segment margin is $60,000, Division L's segment margin is $70,000 - $60,000 = $10,000.

More Company Has Two Divisions: L and M