Question
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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
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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=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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