Tennison Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for May appear below: In addition, common fixed expenses totaled $371,000 and were allocated as follows: $186,000 to the Consumer business segment and $185,000 to the Commercial business segment.
-The contribution margin of the Commercial business segment is:
A)$769,000
B)$272,000
C)$313,000
D)$86,000

Question

Tennison Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for May appear below:  In addition, common fixed expenses totaled $371,000 and were allocated as follows: $186,000 to the Consumer business segment and $185,000 to the Commercial business segment.
-The contribution margin of the Commercial business segment is:
A)$769,000 
B)$272,000 
C)$313,000 
D)$86,000

Quizplus · Accepted Answer

The contribution margin of the Commercial business segment can be calculated by subtracting the variable expenses from the segment revenue. 
Contribution margin = Segment revenue - Variable expenses
= $1,047,000 - $734,000
= $313,000
Therefore, the correct answer is C.

Tennison Corporation Has Two Major Business Segments-Consumer and Commercial