Question
Briar Company provides cleaning services to commercial and residential customers. The commercial business segment provided services to 260 customers and the residential business segment provided
Briar Company provides cleaning services to commercial and residential customers. The commercial business segment provided services to 260 customers and the residential business segment provided services to 565 customers.
| Commercial | Residential | Total | |
| Service Revenue | $86,000 | $117,000 | $203,000 |
| Variable Costs | 22,000 | 53,000 | 75,000 |
| Contribution Margin | 64,000 | 64,000 | 128,000 |
| Fixed Costs | 38,000 | 52,000 | 90,000 |
| Operating Income | $26,000 | $12,000 | $38,000 |
State which segment has the higher average variable cost per unit and provide the amount of the average variable cost per unit for that segment. (Round the answer to the nearest dollar.)
A.Residential, $133
B.Commercial, $94
C.Commercial, $133
D.Residential, $94
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Auditing CPA Exam Review
Authors: Becker
1st Edition
1943628696, 978-1943628698
