Eyestone Corporation has two divisions, A and B.The following data pertain to operations in October: If common fixed expenses were $17,000, total fixed expenses were:

A) $48,000
B) $13,000
C) $31,000
D) $53,000

Question

Eyestone Corporation has two divisions, A and B.The following data pertain to operations in October:

If common fixed expenses were $17,000, total fixed expenses were:

A) $48,000
B) $13,000
C) $31,000
D) $53,000

Veronica Griffin · Accepted Answer

Final Answer : A, Explanation :    Division A:Variable expenses = Variable expense ratio × Sales= 0.60 × $80,000 = $48,000Division B:Variable expenses = Variable expense ratio × Sales= 0.80 × $170,000 = $136,000   Division A:Segment margin = Contribution margin - Traceable fixed expenses$10,000 = $32,000 - Traceable fixed expensesTraceable fixed expenses = $32,000 - $10,000 = $22,000Division B:Segment margin = Contribution margin - Traceable fixed expenses$25,000 = $34,000 - Traceable fixed expensesTraceable fixed expenses = $34,000 - $25,000 = $9,000   Total fixed expenses = Traceable fixed expenses + Common fixed expenses= $31,000 + $17,000 = $48,000

Eyestone Corporation has two divisions, A and B.The following data pertain to operations in October: If common fixed expenses were $17,000, total fixed expenses were:

A) $48,000
B) $13,000
C) $31,000
D) $53,000

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Learning Objectives

Related questions

Eyestone Corporation has two divisions, A and B.The following data pertain to operations in October: If common fixed expenses were $17,000, total fixed expenses were:A) $48,000B) $13,000C) $31,000D) $53,000

Definitions

Learning Objectives

Learning Objectives

Related questions

Eyestone Corporation has two divisions, A and B.The following data pertain to operations in October: If common fixed expenses were $17,000, total fixed expenses were:

A) $48,000
B) $13,000
C) $31,000
D) $53,000