Question

Carroll Corporation has two products, Q and P. During June, the company's net operating income was $28,000, and the common fixed expenses were $60,000. The contribution margin ratio for Product Q was 40%, its sales were $145,000, and its segment margin was $52,000. If the contribution margin for Product P was $50,000, the segment margin for Product P was:

Answer 1

Answer:

$36,000

Explanation:

Calculation to determine what the segment margin for Product P was

Using this formula

Net operating profit= (Segment margin Q + Segment margin P) - Common fixed expenses

Let plug in the formula

28,000= (52,000 + segment margin P) -60,000

88,000= 52,000 + segment margin P

36,000= segment margin P

Therefore the segment margin for Product P was:$36,000