In a segment income statement, which of the following statements is true? a. the segment margin is greater than the contribution margin. B Common fixed charges must be assigned to each segment. vs. the contribution margin is equal to sales less all direct variable and fixed expenses of a segment. D. the segment margin is equal to the contribution margin minus direct and common fixed expenses. and. Segment Margin equals Contribution Margin minus Direct Fixed Expenses.
e. Segment Margin equals Contribution Margin minus Direct Fixed Expenses. Explanation: The profit contribution that each segment makes to cover the common fixed costs of a business is called segment margins and is used to measure the change in profit of a business which, in turn, would occur if the segment were eliminated. represented mathematically by: segment margin = contribution margin – direct fixed expenses
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