Question

Ferrar Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for March appear below: In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment The contribution margin of the Commercial business segment is: Select one: a. $137,000 b. $184,000 c. $62,000 d. $423,000

Answer 1

Contribution margin of the Commercial business segment = $137,000

Step-by-step explanation:

Given:

Fixed expenses = $210,000

Consumer business segment = $122,000

Commercial business segment = $88,000

Note:

Missing input

Sales revenue of Commercial business segment = $280,000

Variable expenses of Commercial business segment = $143,000

Find:

Contribution margin of the Commercial business segment

Computation:

Contribution margin = Sales revenue - Variable expenses

Contribution margin of the Commercial business segment = $280,000 - $143,000

Contribution margin of the Commercial business segment = $137,000