Answer (D) is correct . The best measure of the segment’s economic performance includes all costs except the fixed manufacturing costs allocated to the segment. Thus, the best measure of economic performance is $120,000 ($950,000 – $430,000 – $150,000 – $250,000).
Answer (A) is incorrect because The amount of $370,000 measures the performance of the marketing segment manager ($950,000 – $430,000 – $150,000).
Answer (B) is incorrect because The amount of $10,000 includes the allocated costs ($950,000 – $430,000 – $150,000 – $250,000 – $110,000).
Answer (C) is incorrect because The contribution margin is $520,000 ($950,000 – $430,000).
|
The best measure of the economic performance of the suburban marketing segment is:
