A Segment of a Business Reported a Contribution Margin of $36,000

question 109

Multiple Choice

A segment of a business reported a contribution margin of $36,000 and common costs of $12,000.If the segment had been eliminated,the company-wide net income would have been

• A) $12,000 higher.
• B) $24,000 lower.
• C) $36,000 lower.
• D) $24,000 higher.

---

Definitions:

Incremental Cash Flows

The additional cash flow a company receives from taking on a new project or investment, after accounting for expenses.

Market Values

The market price at which a service or asset can currently be sold or bought.

Transaction Costs

Expenses incurred during the buying or selling of goods and services, which can include broker fees, commissions, and taxes.