Consider the Following Portion of a Segmented Income Statement for the Year

Consider the following portion of a segmented income statement for the year just ended.Assume fixed expenses of Division A include $60,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments or reduce the common expenses. What is A's divisional segment margin?
$$\begin{array} { l r } \text { Sales } & \$ 200,000 \\\text { Variable manufacturing costs } & 120,000 \\\text { Gross profit } & \$ 80,000 \\\text { Fixed expenses (direct and allocated) } & 100,000 \\\text { Operating income (loss) } & \$ ( 20,000 ) \end{array}$$

A) ($10,000)
B) $10,000
C) $40,000
D) $100,000

Correct Answer:

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