A Segment of a Business Reported a Contribution Margin of $36,000

question 112

Multiple Choice

A segment of a business reported a contribution margin of $36,000 and controllable fixed costs of $12,000.If the segment had been eliminated,the company-wide net income would have been

• A) $12,000 higher.
• B) $24,000 lower.
• C) $36,000 lower.
• D) $24,000 higher.

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Definitions:

Repetitive Focus

A production strategy where the same products or services are produced in high volumes over a long period using a dedicated set of resources.

Variable Costs

Expenses that vary in relation to the amount of work performed or quantity of products made, including labor and materials.

Break Even

The point at which total costs and total revenues are equal, resulting in no net loss or gain for a business.

Net Present Value

A financial metric that calculates the present value of net cash flows from an investment, considering the time value of money.