Orderly Headquarters,Inc.has two business segments: Commercial and Residential.The following data have been provided for the year ending December 31,20XX.
The company incurred $1,500 as fixed costs.
Requirements:
a)Prepare the income statement of Orderly Headquarters showing the contribution margin of each segment.
b)Calculate the contribution margin ratio of each segment.Which segment is more profitable and why?
Definitions:
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