Question
Google has three divisions: Search, Cloud, and YouTube. The following data is available for the current period: Division Revenue Variable Costs Fixed Costs Controllable Fixed
Google has three divisions: Search, Cloud, and YouTube. The following data is available for the current period:
Division | Revenue | Variable Costs | Fixed Costs | Controllable Fixed Costs |
Search | $10,000,000 | $4,000,000 | $2,000,000 | $1,000,000 |
Cloud | $8,000,000 | $3,000,000 | $1,500,000 | $800,000 |
YouTube | $6,000,000 | $2,500,000 | $1,000,000 | $600,000 |
Requirements:
- Prepare the Responsibility Income Statement for each division.
- Calculate the Controllable Margin for each division.
- Determine the overall profitability of Google.
- Analyze which division has the highest Controllable Margin.
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Accounting Information Systems
Authors: Marshall B. Romney, Paul J. Steinbart
12th edition
132552620, 978-0132552622
