Johns Company Operates in Three Different Industries Each of Which

question 65

Multiple Choice

Johns Company operates in three different industries each of which is appropriately regarded as a reportable segment. Segment No. 1 contributed 60 percent of Johns Company's total sales. Sales for Segment No. 1 were $600,000 and total variable costs were $400,000. Total common costs for all segments were $320,000. Johns allocates common costs based on the ratio of each segment's sales to the total sales. What should be the contribution margin presented for Segment No. 1?

• A)$(100,000)
• B)$8,000
• C)$20,000
• D)$200,000

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Definitions:

Products

Goods or services offered by a business to its customers.

Web Site

A collection of related web pages under a single domain name, typically hosted on at least one web server, accessible via the Internet.

Bundling

The practice of selling multiple products or services together as a combined package, often at a discounted price.

Cross-selling

The strategy of selling additional products or services to an existing customer based on their previous purchases.