Nolan Company Has Two Segments: Audio and Video

question 14

Multiple Choice

Nolan Company has two segments: Audio and Video.Sales for the Audio Segment were $500,000,and variable costs were 40% of sales.The Video Segment also had sales of $500,000,but variable costs were 60% of sales.Fixed costs directly traceable to the Audio and Video segments were $150,000 and $120,000,respectively.Common fixed costs of $200,000 were arbitrarily allocated equally to each segment. ​
What was the segment margin of the Video Segment?

• A)$200,000
• B)$ 80,000
• C)$(20,000)
• D)$ 150,000

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Definitions:

Rolling Budgets

Budgeting method that continuously updates by adding a new budget period as the current period is completed, ensuring ongoing financial planning.

Budgeted Financial Statements

Financial statements that predict revenues, expenses, and net income based on the budget for a future period.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, typically used to assess liquidity and manage cash effectively.

Rolling Budget

A continuously updated budget that extends into the future for a consistent period, as current months pass, new months are added to the budget.