The Following Information Pertains to the Northwest Territory of McDonald

question 75

Multiple Choice

The following information pertains to the Northwest Territory of McDonald Company: $$\begin{array} { l l } \text { Net Sales } & \$ 5,000 \\\text { Variable costs: } & \\\text { Cost of merchandis e sold } & 1,200 \\\text { Operating exp enses } & 450 \\\text { Fixed costs: } & \\\text { Controll able by segment manager } & 600 \\\text { Controllable by others } & 250 \\\text { Unallocated costs } & 150\end{array}$$ The contribution margin is:

• A) $3,650
• B) $2,500
• C) $2,750
• D) $3,350

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Definitions:

Services

Intangible products that are consumed at the point of sale and do not result in ownership of physical goods.

Net Exports

The balance of a nation's trade, measured by subtracting its imports from its exports of goods and services.

Depreciation

The process of allocating the cost of a tangible or physical asset over its useful life, reflecting the decrease in value of an asset over time due to use, wear and tear, or obsolescence.

Gross Private Domestic Investment

The total spending on capital goods by private businesses and households within a country's economy, not including expenditures by the government.