Problem: The company reports the following costs and revenues for one of its segments:
Net sales revenue . . . . . . . . . . . . $728,000
Cost of goods sold . . . . . . . . . . . . 416,000
Selling and administrative costs . . . . . 104,000
Advertising cost . . . . . . . . . . . . . 62,400
Insurance cost . . . . . . . . . . . . . . 82,000
Of these costs, cost of goods sold and selling and administrative costs are variable, advertising is a direct fixed cost, and insurance is an indirect fixed cost. Using this information, prepare a segment margin statement for this segment.
Segment-Margin Ratio
Using the information for the problem above, compute the segment-margin ratio.