West Company operates two divisions (Division A and Division B). TOTAL company sales = $500,000. Division...

West Company operates two divisions (Division A and Division B). TOTAL company sales = $500,000. Division A sales represent 40% of the total. Also, Division B reports the following information: Contribution margin = 45.0%; Traceable AND controllable fixed expenses = $68,000; and segment margin = 8.0%. Required: Compute Traceable NOT Controllable fixed expenses for Division B

Solutions

Expert Solution

Segmented Income statement
Particulars		Division A	Division B	Total company
Sales	a	$ 200,000.00	$ 300,000.00	$ 500,000.00
Variable expenses	b=a-c	$ -	$ 165,000.00
Contribution margin	*c=a45%**	$ -	$ 135,000.00
Traceable fixed expenses- Controllable	d	$ -	$ 68,000.00
Traceable fixed expenses- Not Controllable	e=c-d-f	$ -	$ 43,000.00
Segment margin	*f=a8%**	$ -	$ 24,000.00	$ -

Traceable Not controllable fixed expenses for Division B is $43,000

Please do upvote if you found the answer useful.

Feel free reach in the comment section in case of any clarification or queries.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Johnny C. has two divisions. East division sells a component (L689) to West division. West then...

Johnny C. has two divisions. East division sells a component (L689) to West division. West then assembles a product, CAGE, using L689 and sells it to customers. East division incurs $50 of variable cost per unit of L689 and allocates $80 of fixed cost to each unit. East’s factory has limited space, so every unit of L689 it produces means one less unit of L690 is made. While L689 is only sold to West division, East division sells L690 to...

Vaughan Company has 3 divisions with the following information: Division A Division B Division C Sales...

Vaughan Company has 3 divisions with the following information: Division A Division B Division C Sales $750,000 $700,000 $360,000 Net Operating Income $20,000 $34,000 $36,000 Average Operating Assets $200,000 $500,000 $300,000 Minimum Required Rate of Return 12% 6% 11% Assume that each division was presented with an investment opportunity that would yield a rate of return of 11.2%. If performance is being measured by ROI a.both division A and B will accept the project, b.only division A will accept the...

Alex Ltd, has two divisions, a Parts Division and Marketing Division. Each division operates as a...

Alex Ltd, has two divisions, a Parts Division and Marketing Division. Each division operates as a profit centre. The Parts Division manufactures keyboards and is free to sell its product internally and externally. The Parts Division’s annual capacity is 45,000 units and its fixed cost is $720,000. Currently, sexternal sales represent 70% of the Parts Division’s production capacity. The selling price for a keyboard is $60, and the variable manufacturing cost is 60% of the selling price. Commissions is $...

5. Johnson Corp. has two divisions, Division A and Division B. Division B has asked Division...

5. Johnson Corp. has two divisions, Division A and Division B. Division B has asked Division A to supply it with 5,000 units of part WD26 this year to use in one of its products. Division A has the capacity to produce 25,000 units of part WD26 per year. Division A expects to sell 21,000 units of part WD26 to outside customers this year at a price of $20.00 per unit. To fill the order from Division B, Division A...

San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as...

San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale. Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow. Manufacturing Assembly Capacity (units) 412,000 212,000 Sales pricea $ 424 $ 1,360 Variable costsb $ 220 $ 504 Fixed costs $ 40,120,000 $ 24,120,000 a For Manufacturing, this is the price to...

San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as...

San Jose Company operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale. Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow: Manufacturing Assembly Capacity (units) 404,000 204,000 Sales pricea $ 408 $ 1,320 Variable costsb $ 180 $ 488 Fixed costs $ 40,040,000 $ 24,040,000 a For Manufacturing, this is the price to third parties....

A multinational company has many divisions. Two of these divisions are Mic Division and Mandy Division....

A multinational company has many divisions. Two of these divisions are Mic Division and Mandy Division. The Mic Division produces a component that is used by the Mandy Division. The cost of manufacturing the component is as follows: Direct materials $10 Direct labour $6 Variable overhead $4 Fixed overhead $5* Total cost $25 *Based on a normal volume of 400,000 components Other costs incurred by the Mic Division are as follows: Fixed selling and administrative: $400,000 Variable selling: $1.50 per...

Tulip Company is made up of two divisions: A and B. Division A produces a widget...

Tulip Company is made up of two divisions: A and B. Division A produces a widget that Division B uses in the production of its product. Variable cost per widget is $0.95; full cost is $1.40. Comparable widgets sell on the open market for $1.90 each. Division A can produce up to 1.80 million widgets per year but is currently operating at only 50 percent capacity. Division B expects to use 90,000 widgets in the current year. 1. Determine the...

Cran Boost Products is a cranberry cooperative that operates two divisions, a harvesting division and a...

Cran Boost Products is a cranberry cooperative that operates two divisions, a harvesting division and a processing division. Currently, all of harvesting's output is converted into cranberry juice by the processing division, and the juice is sold to large beverage companies that produce cranberry juice blends. The processing division has a yield of 500 gallons of juice per 1,000 pounds of cranberries. Cost and market price data for the two divisions are as follows: Harvesting Division Processing Division Variable cost...

CrangoCrango Products is a cranberry cooperative that operates two? divisions: a harvesting division and a processing...

CrangoCrango Products is a cranberry cooperative that operates two? divisions: a harvesting division and a processing division.? Currently, all of? harvesting's output is converted into cranberry juice by the processing? division, and the juice is sold to large beverage companies that produce cranberry juice blends. The processing division has a yield of 500 gallons of juice per? 1,000 pounds of cranberries. Cost and market price data for the two divisions are as? follows: Harvesting Division Processing Division Variable cost per...

Subjects