Ieso Company has two stores: J and K. During November, Ieso Company reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.
-The segment margin ratio in Store J was:
A) 16%
B) 24%
C) 40%
D) 60%

Question

Quizplus · Accepted Answer

The segment margin ratio is calculated by dividing the segment margin by the sales. In Store J, the segment margin is $30,000 and the sales are $100,000. Therefore, the segment margin ratio in Store J is $30,000/$100,000 = 30%.

Ieso Company Has Two Stores: J and K