The segment margin is obtained by deducting the common fixed costs of a segment from the segment's contribution margin.
The profit or loss generated by one portion of a business is referred to as segment margin. Segment margin only considers the segment's expenses and revenue. By analyzing a company's strengths and weaknesses, segment margin can provide a true depiction of where it is operating well and where it is not. The segment margin is calculated by subtracting a segment's common fixed costs from the segment's contribution margin.
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