Provided below are the marketing segment sales for Caterpillar, Inc., for a recent year. In addition, assume

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Provided below are the marketing segment sales for Caterpillar, Inc., for a recent year.

Caterpillar, Inc. Machinery and Engines Marketing Segment Sales (in millions) Large Marine & All Power Petroleum Buildin

In addition, assume the following information:

Building Europe/Africa/ Construction Middle East Electric Products Large Marine & All Power Petroleum Industrial Infra-

a. Use the sales information and the additional assumed information to prepare a contribution margin by segment report. Round to two decimal places. In addition, calculate the contribution margin ratio for each segment as a whole percent, rounded to one decimal place.
b. Prepare a table showing the manufacturing margin, dealer commissions, and variable promotion expenses as a percent of sales for each segment. Round whole percents to one decimal place.
c.   Use the information in (a) and (b) to interpret the segment performance.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Financial and Managerial Accounting Using Excel for Success

ISBN: 978-1111993979

1st edition

Authors: James Reeve, Carl S. Warren, Jonathan Duchac

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