Stargazer Services Co.is organized in three segments: Sky Mountain, Diamond View, and Star Party.Data for the company and for these segments follow: What are Star Party's segment contribution margin and noncontrollable ﬁxed costs?
A)Segment contribution margin = $120; noncontrollable ﬁxed costs = $84.
B)Segment contribution margin = $144; noncontrollable ﬁxed costs = $36.
C)Segment contribution margin = $144; noncontrollable ﬁxed costs = $84.
D)Segment contribution margin = $120; noncontrollable ﬁxed costs = $36.
E)Cannot be determined.

Question

Stargazer Services Co.is organized in three segments: Sky Mountain, Diamond View, and Star Party.Data for the company and for these segments follow:  What are Star Party's segment contribution margin and noncontrollable ﬁxed costs?
A)Segment contribution margin = $120; noncontrollable ﬁxed costs = $84. 
B)Segment contribution margin = $144; noncontrollable ﬁxed costs = $36. 
C)Segment contribution margin = $144; noncontrollable ﬁxed costs = $84. 
D)Segment contribution margin = $120; noncontrollable ﬁxed costs = $36. 
E)Cannot be determined.

Quizplus · Accepted Answer

To calculate the segment contribution margin for Star Party, we need to subtract the variable costs and the controllable fixed costs from the segment revenue:

$200 - ($40 + $40 + $96) = $24

To calculate the noncontrollable fixed costs for Star Party, we need to subtract the controllable fixed costs from the total fixed costs:

$120 - $84 = $36

Therefore, the segment contribution margin for Star Party is $24 and the noncontrollable fixed costs are $36. The correct answer is D.