In: Accounting
ABC Company operates three divisions, X, Y, and Z. The following information is available for the most recent month: ABC Company: Segment margin ............. $200,000 Contribution margin ........ 40% of sales Division X: Sales revenue .............. $732,000 Contribution margin ........ $260,000 Segment margin ............. $ 30,000 Division Y: Sales revenue .............. $276,000 Contribution margin ........ 25% of sales Division Z: Sales revenue .............. $200,000 Traceable fixed costs ...... $ 33,000 Calculate the segment margin reported by Division Z during the most recent month.
Segment margin reported by Division Z = $ 121,200 [Answer]
--Working
Division X |
Division Y |
Division Z |
Total ABC Company |
|
Sales Revenue |
$732,000 |
$276,000 |
$200,000 |
$1,208,000 |
Variable Cost |
$472,000 |
$207,000 |
$45,800 |
$724,800 |
Contribution margin |
$260,000 |
$69,000 |
$154,200 |
$483,200 |
Traceable fixed cost |
$230,000 |
$20,200 |
$33,000 |
$283,200 |
Segment margin |
$30,000 |
$48,800 |
$121,200 [Answer] |
$200,000 |
--Calculation
Division X |
Division Y |
Division Z |
Total ABC Company |
|
Sales Revenue |
732000 |
276000 |
200000 |
=732000+276000+200000 |
Variable Cost |
=732000-260000 |
=276000-69000 |
=200000-154200 |
=472000+207000+45800 |
Contribution margin |
260000 |
=276000*25% |
=483200-69000-260000 |
=1208000*40% |
Traceable fixed cost |
=260000-30000 |
=69000-48800 |
33000 |
=483200-200000 |
Segment margin |
30000 |
=200000-121200-30000 |
=154200-33000 |
200000 |