Question

Carroll Corporation has two products, Q and P. During June, the company's net operating income was $26,000, and the common fixed expenses were $56,000. The contribution margin ratio for Product Q was 40%, its sales were $141,000, and its segment margin was $48,000. If the contribution margin for Product P was $46,000, the segment margin for Product P was:

Answer 1

Answer:

$34,000

Explanation:

Given the above information, the computation of segment margin for product P is shown below;

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

$26,000 = ($48,000 + Segment margin P) - $56,000

$26,000 = $48,000 + Segment margin P - $56,000

$26,000 = Segment margin P - $8,000

Segment margin P = $26,000 + $8,000

Segment margin P = $34,000