Answer (D) is correct . Segment margin is the contribution margin for a segment of a business minus fixed costs. It is a measure of long-run profitability. Thus, an allocation of the corporate officers’ salaries should not be included in segment margin because they are neither variable costs nor fixed costs that can be rationally allocated to the segment. Other items that are often not allocated include corporate income taxes, interest, company-wide R&D expenses, and central administration costs.
Answer (A) is incorrect because Sales of the division would appear on the statement.
Answer (B) is incorrect because The division’s fixed selling expenses are separable fixed costs.
Answer (C) is incorrect because Variable costs of the division are included.
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