The term "divisional margin" is used to describe the:
A) amount a given division contributes toward covering common corporate expenses.
B) sum of divisional cost of goods sold and net income.
C) excess of divisional sales over its variable manufacturing expenses.
D) excess of manufacturing margin over all variable expenses.

Question

Quizplus · Accepted Answer

Divisional margin refers to the amount of profit that each division of a company contributes toward covering common corporate expenses. It is calculated as the divisional net income minus any allocated corporate expenses. It is an important measure for assessing the performance of each division and making decisions about resource allocation and investment. Choices B, C, and D are not accurate definitions of divisional margin.

The Term "Divisional Margin" Is Used to Describe The