Consider the Following Portion of a Segmented Income Statement for the Year

question 49

Multiple Choice

Consider the following portion of a segmented income statement for the year just ended.Assume fixed expenses of Division A include $60,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments or reduce the common expenses. What is A's divisional segment margin?
$$\begin{array} { l r } \text { Sales } & \$ 200,000 \\\text { Variable manufacturing costs } & 120,000 \\\text { Gross profit } & \$ 80,000 \\\text { Fixed expenses (direct and allocated) } & 100,000 \\\text { Operating income (loss) } & \$ ( 20,000 ) \end{array}$$

• A)($10,000)
• B)$10,000
• C)$40,000
• D)$100,000

Grasp the concept of earnings distribution through the payout ratio.

Understand the concept of trading on equity and how to analyze its profitability.

Classify financial ratios into liquidity, profitability, and solvency and understand what each measures.

Understand the roles and responsibilities of state and local governments, including their financial constraints.

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Definitions:

Time-Consuming

Activities or processes that require a significant amount of time to complete, often implying inefficiency or labor intensity.

Real-World Complications

Challenges or issues that arise in practical situations outside of controlled or theoretical environments.

Analytical Models

Mathematical or simulation models that use analytical methods to solve complex problems or make predictions by analyzing various data inputs.

Time Compression

Speeding up processes or activities to reduce their duration, without sacrificing quality, often achieved through more efficient methods, technologies, or resource allocations.