Asked by Raymond Shaquille on Jun 28, 2024
Verified
Variable expenses in Store K totaled:
A) $70,000
B) $110,000
C) $200,000
D) $130,000
Variable Expenses
Costs that change in proportion to the level of activity or production volume.
- Comprehend the importance of fixed and variable costs in the analysis of cost-volume-profit relationships.
Verified Answer
ZK
Zybrea KnightJul 03, 2024
Final Answer :
D
Explanation :
The question does not provide any further information or context to determine the correct answer with certainty. However, based on the options provided, D seems to be the most reasonable choice as it is the highest value among the options, which suggests that Store K has a significant amount of variable expenses.
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
Store K segment ratio = Store K segment margin ÷ Store K sales
0.15 = $30,000 ÷ Store K sales
Store K sales = $30,000 ÷ 0.15 = $200,000 Store K contribution margin = Store K sales - Store K variable expenses
$70,000 = $200,000 - Store K variable expenses
Store K variable expenses = $200,000 - $70,000 = $130,000
$30,000 = Store K contribution margin - $40,000
Store K contribution margin = $30,000 + $40,000 = $70,000
Store K segment ratio = Store K segment margin ÷ Store K sales
0.15 = $30,000 ÷ Store K sales
Store K sales = $30,000 ÷ 0.15 = $200,000 Store K contribution margin = Store K sales - Store K variable expenses
$70,000 = $200,000 - Store K variable expenses
Store K variable expenses = $200,000 - $70,000 = $130,000
Learning Objectives
- Comprehend the importance of fixed and variable costs in the analysis of cost-volume-profit relationships.