Question

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

Answer 1

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=a*45%	$                     -	$ 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=a*8%	$                     -	$    24,000.00	$                       -
Traceable Not controllable fixed expenses for Division B is $43,000

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