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1. The segment margin is obtained by deducting the traceable fixed costs of a segment from the segment’s contribution margin is the correct answer.

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   Segment margin is the amount of net profit or net loss generated by a portion of a business. Segment margin is the margin available after a segment has covered all of its costs. It’s one of the best ways to determine the long-term profitability of a segment.

   i.e., Segment Margin = Segment’s Contribution Margin – Fixed Costs traced to the Segment

   Contribution margin ratio is commonly expressed as a percentage of sales prices. Contribution margin is the amount remaining from sales revenue once all variable costs have been removed.

   i.e., Contribution Margin = Sales Revenue – Variable Costs

   Hence we can conclude that the segment margin is obtained by deducting the traceable fixed costs of a segment from the segment’s contribution margin is the correct answer.

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