Segment (Product) Margin Is Calculated By

question 38

Multiple Choice

Segment (product) margin is calculated by:

• A) Subtracting common fixed costs from its contribution margin.
• B) Subtracting variable costs traceable to that product from contribution margin.
• C) Subtracting fixed costs traceable to that product from its contribution margin.
• D) Summing all contribution margins, then subtracting common fixed costs.
• E) None of the above.

---

Definitions:

Annual Cost Savings

The reduction in costs achieved during a specific year, often through efficiency improvements or expense cuts.

Combined Present Value

A method of evaluating the overall present value of multiple future cash flows by discounting them back to their present value at a specific discount rate.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to run its operations.

Beginning

The starting point or initial state of an event, process, or accounting period.