The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions: Restin, Inc.Los Angeles DivisionBay Area Division Central Valley DivisionRevenues$750,000 $200,000 $235,000 $325,000 Variable operating expenses 410,000 110,000 120,000 180,000 Controllable fixed expenses 120,000 65,000 75,000 70,000 Noncontrollable fixed expenses 60,000 15,000 20,000 25,000 In addition, the company incurred common fixed costs of $18,000Assume that the Los Angeles division increases its promotion expense, a controllable fixed cost, by $10,000. As a result, revenues increased by $50,000. If variable expenses are tied directly to revenues, the new Los Angeles segment contribution margin is:
A. $12,500.
B. $50,000.
C. $22,500.
D. $32,500.
E. $60,000.
Answer: C
You might also like to view...
The process by which management allocates funds among competing capital investment proposals is termed ________
a. capital expenditures budget b. currency exchange rates c. capital rationing d. inflation
Comprehensive Form (HO-5) provides all risks coverage on both the dwelling and personal property
Indicate whether the statement is true or false.
A tool used for presenting a chain of causes and effects is called a _____
a. run chart b. fishbone diagram c. scatter diagram d. checksheet
Nelson Company experienced the following transactions during Year 1, its first year in operation.1. Issued $12,000 of common stock to stockholders. 2. Provided $4,600 of services on account. 3. Paid $3,200 cash for operating expenses. 4. Collected $3,800 of cash from accounts receivable. 5. Paid a $200 cash dividend to stockholders.The total amount of assets shown on Nelson Company's December 31, Year 1 balance sheet is:
A. $12,400. B. $13,400. C. $12,600. D. $13,200.