Asked by Tyler Bergh on Apr 26, 2024
Verified
Ieso Corporation's total fixed expenses for the year were:
A) $40,000
B) $100,000
C) $140,000
D) $170,000
Fixed Expenses
Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance.
- Understand the significance of fixed and variable expenses in cost-volume-profit analysis.
Verified Answer
FM
Fernanda MorenoApr 30, 2024
Final Answer :
C
Explanation :
Store K segment margin = Store K contribution margin - Store K traceable fixed expenses
$30,000 = Store K contribution margin - $40,000
Store K contribution margin = $30,000 + $40,000 = $70,000
Total traceable fixed expenses = $60,000 + $40,000 = $100,000 Store J segment margin = $100,000 - $60,000 = $40,000 Total segment margin = $40,000 + $30,000 = $70,000 Net operating income = Total segment margin - Common fixed expenses
$30,000 = $70,000 - Common fixed expenses
Common fixed expenses = $70,000 - $30,000 = $40,000
Total fixed expenses = Total traceable fixed expenses + Common fixed expenses
= $100,000 + $40,000 = $140,000
Reference: CHO7-Ref43
Ferrar Corporation has two major business segments: Consumer and Commercial.Data for the segments and for the company for March appear below: In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment.
$30,000 = Store K contribution margin - $40,000
Store K contribution margin = $30,000 + $40,000 = $70,000
Total traceable fixed expenses = $60,000 + $40,000 = $100,000 Store J segment margin = $100,000 - $60,000 = $40,000 Total segment margin = $40,000 + $30,000 = $70,000 Net operating income = Total segment margin - Common fixed expenses
$30,000 = $70,000 - Common fixed expenses
Common fixed expenses = $70,000 - $30,000 = $40,000
Total fixed expenses = Total traceable fixed expenses + Common fixed expenses
= $100,000 + $40,000 = $140,000
Reference: CHO7-Ref43
Ferrar Corporation has two major business segments: Consumer and Commercial.Data for the segments and for the company for March appear below: In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment.
Learning Objectives
- Understand the significance of fixed and variable expenses in cost-volume-profit analysis.