The following information pertains to the Southern Division of Bama Company: Variable Costs:
Fixed costs:
The contribution by segment is ________.
A)$2,350
B)$2,500
C)$2,750
D)$3,350

Question

The following information pertains to the Southern Division of Bama Company:  Variable Costs:
 Fixed costs:
 The contribution by segment is ________.
A)$2,350 
B)$2,500 
C)$2,750 
D)$3,350

Quizplus · Accepted Answer

The contribution by segment can be calculated as follows: 
Contribution = Sales - Variable Costs 
Contribution for Southern Division = $15,000 - ($7,000 + $5,500 + $2000) 
Contribution for Southern Division = $15,000 - $14,500 
Contribution for Southern Division = $500 
Therefore, the contribution by segment is $500. The closest option to this is option B, $2,500, which is the total contribution for all five divisions of Bama Company combined.

The Following Information Pertains to the Southern Division of Bama