Choose all the correct options

Question

A health plan can use segment margins to evaluate the profitability of its profit centers. One characteristic of a
segment margin is that this margin

Accepted Answer

Is the portion of the contribution margin that remains after a segment has covered its direct

fixed costs

Answer

Incorporates only the costs attributable to a segment, but it does not incorporate revenues

Answer

Considers only a segment's costs that fluctuate in direct proportion to changes in the segment's

level of operating activity

Answer

Evaluates the profit center's effective use of assets employed to earn a profit

A health plan can use segment margins to evaluate the profitability of its profit centers. One characteristic of a segment margin is that this margin