More Company Has Two Divisions: L and M

question 81

Multiple Choice

More Company has two divisions: L and M.During July,the contribution margin in Division L was $60,000.The contribution margin ratio in Division M was 40%,and its sales were $250,000.Division M's segment margin was $60,000.The common fixed expenses were $50,000,and the company operating income was $20,000.What was the segment margin for Division L?

• A) $0.
• B) $10,000.
• C) $50,000.
• D) $60,000.

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Definitions:

Market Wage

The prevailing rate of pay for labor in a particular industry or occupation, determined by the supply and demand for labor in that market.

Government Intervention

Actions taken by a government to influence its economy, which can include regulations, subsidies, and tariffs.

Market Economy

An economic system where supply and demand from private enterprises and consumers dictate the production of goods and services.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace where individuals pursuing their own interest inadvertently benefit society at large.