Asked by Jason Fitch on Jul 17, 2024
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Ieso Corporation has two stores: J and K. During November, Ieso Corporation reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.Sales in Store J totaled:
A) $400,000
B) $250,000
C) $150,000
D) $100,000
Contribution Margin
The gap between the revenue from sales of a product and its variable expenses, demonstrating the extent to which it aids in covering constant costs and producing earnings.
Segment Margin
The amount of profit or loss generated by a specific segment of a business, often used to assess the profitability of different parts of a business.
- Understand the construction and analysis of segmented income statements in a contribution format.
- Ascertain the contribution margin for distinct business segments.
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Learning Objectives
- Understand the construction and analysis of segmented income statements in a contribution format.
- Ascertain the contribution margin for distinct business segments.
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