Question: A retail chain operates in multiple segments: Segment A revenue $2,000,000, Segment B revenue $1,500,000, Segment C revenue $1,200,000. Each segment incurs direct costs $500,000

  1. A retail chain operates in multiple segments: Segment A revenue $2,000,000, Segment B revenue $1,500,000, Segment C revenue $1,200,000. Each segment incurs direct costs $500,000 and allocated fixed costs $300,000.
    • Requirements:
      • Prepare a segmented income statement for each segment.
      • Calculate the contribution margin and contribution margin ratio for each segment.
      • Evaluate the profitability of each segment using segment margin analysis.
      • Recommend strategies to improve the performance of the least profitable segment.
      • Discuss the implications of segment reporting on managerial decision-making.

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