The Gasson Company sells three products, Product A, Product B and Product C, and

Question

The Gasson Company sells three products, Product A, Product B and Product C, and had sales of $1,000,000 during the month of June. The company's overall contribution margin ratio was 37% and fixed expenses totaled $350,000. Sales were: Product A, $500,000; Product B, $300,000; and Product C, $200,000. Traceable fixed costs were: Product A, $120,000; Product B, $100,000; and Product C, $60,000. The variable expenses of Product A were $300,000 and the variable expenses of Product B were $180,000.
The product line segment margin for Product A for June was: 1) $200,000.
2) $80,000.
3) $65,000.
4) $10,000.

Explanation / Answer

                                                 Prod. B
Revenue                                   $300,000
Variable cost                             $180,000             
                                            ___________
Contribution                         $120,000
                                            ============

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