Question

In: Accounting

ABC Company operates three divisions, X, Y, and Z. The following information is available for the...

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.

Solutions

Expert Solution

  • Requirement

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

ekkarill92 answered 3 years ago
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