Question

In: Accounting

Jenny Craig. has 2 branches--East and West branches. The company's fixed costs that are traceable to...

Jenny Craig. has 2 branches--East and West branches. The company's fixed costs that are traceable to the East branch is $175,000, while fixed costs that are traceable to the West branch is $180,000. The East branch is further divided into two segments based on the customer types: the local and the nonlocal. Traceable fixed cost for the local is $68,250, and traceable fixed cost for the nonlocal is $31,200. Q) How much is the common fixed costs of the two order types for the Eastern branch?

Expert Solution

Sol:

Total Traceable Fixed cost for Eastern Branch=

Traceable Fixed cost allocated for local in east branch +Tracebale Fixed cost allocated for Non local in east branch+Common fixed cost of the two order types (local and non local) for the eastern branch

Given

Total Traceable Fixed cost for East BRanch =$175000

Total Traceable Fixed cost For Local in east branch =$68250

Total Traceable Fixed cost for non local in East branch =$31200

Computation of Common fixed cost of the two order types (local and non local) for the eastern branch

Total Traceable Fixed cost for Eastern Branch=

Traceable Fixed cost allocated for local in east branch +Tracebale Fixed cost allocated for Non local in east branch+Common fixed cost of the two order types (local and non local) for the eastern branch

On substituing ,

$175000=

$68250+$31200+ Common fixed cost of the two order types (local and non local) for the eastern branch

Common fixed cost of the two order types (local and non local) for the eastern branch

=$175000-$68250-$31200

=$75550

hence Common fixed cost of the two order types (local and non local) for the eastern branch=$75550

ekkarill92 answered 1 year ago

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