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Nolan Company has two segments: Audio and Video. Sales for the Audio Segment were $500,000, and variable costs were 60% of sales. The Video Segment
Nolan Company has two segments: Audio and Video. Sales for the Audio Segment were $500,000, and variable costs were 60% of sales. The Video Segment also had sales of $500,000, but variable costs were 60% of sales. Fixed costs directly traceable to the Audio and Video segments were $150,000 and $120,000, respectively. Common fixed costs of $200,000 were arbitrarily allocated equally to each segment. What was the contribution margin of the Audio Segment.
a. $200,000 b. $150,000 c. $300,000 d. $50,000
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