Kimble Industries' production division reported a net operating loss of $500,000 in 2021.Included in that amount were common fixed corporate expenses of $720,000 that were allocated to divisions based on segment gross profit.The division's segment margin was
A)$220,000.
B)$500,000.
C)($220,000).
D)($500,000).

Question

Quizplus · Accepted Answer

The segment margin is calculated by adding the net operating loss to the allocated common fixed expenses. Therefore, $500,000 (loss) + $720,000 (allocated expenses) = $220,000 segment margin.

Kimble Industries' Production Division Reported a Net Operating Loss of $500,000