The Crested Butte Company recorded the following data for a product line: $$\begin{array} { l r }
\text { Sales } & \$ 250,000 \
\text { Variable manufacturing expenses } & 50,000 \
\text { Direct fixed manufacturing expenses } & 37,500 \
\text { Variable selling and administrative expenses } & 25,000 \
\text { Direct fixed selling and admin. expenses } & 30,000
\end{array}$$
What is the segment margin of the product line?
A)$107,500
B)$162,500
C)$75,000
D)$175,000

Question

The Crested Butte Company recorded the following data for a product line: $$\begin{array} { l r } 
\text { Sales } & \$ 250,000 \
\text { Variable manufacturing expenses } & 50,000 \
\text { Direct fixed manufacturing expenses } & 37,500 \
\text { Variable selling and administrative expenses } & 25,000 \
\text { Direct fixed selling and admin. expenses } & 30,000
\end{array}$$
What is the segment margin of the product line?
A)$107,500
B)$162,500
C)$75,000
D)$175,000

Quizplus · Accepted Answer

The segment margin is calculated as Sales minus all variable expenses and direct fixed expenses. So, $250,000 - $50,000 - $25,000 - $37,500 - $30,000 = $107,500.

The Crested Butte Company Recorded the Following Data for a Product