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

Multiple Choice

Consider the following portion of a segmented income statement for the year just ended. Assume that the fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses. $$\begin{array} { l r } & \text { Division } x \\\text { Sales } & \$ 100,000 \\\text { Variable manufacturing costs } & 60,000 \\ \text { Gross profit }& \$ 40,000 \\\text { Fixed expenses (direct and allocated) }& 50,000 \\\text { Operating income (loss) } & \$ ( 10,000 ) \end{array}$$ What is X's divisional segment margin?

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