Ferrar Corporation Has Two Major Business Segments: Consumer and Commercial

question 230

Multiple Choice

Ferrar Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below: In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment.The contribution margin of the Commercial business segment is:

• A) $137,000
• B) $184,000
• C) $62,000
• D) $423,000

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Definitions:

Profit-maximizing

The process or strategy of adjusting production and operation to generate the highest possible profit.

Many Buyers

A market condition characterized by the presence of numerous consumers or purchasers for goods and services.

Many Sellers

A characteristic of competitive markets where a large number of sellers offer similar or identical products, preventing any single seller from influencing market prices.

Distinguish

To recognize or treat someone or something as different from others.