Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Finance Department at Mark Company produced the following segment margin statement for the most recent period. Division A Division B Total Revenue $1,249,200 $1,873,800

The Finance Department at Mark Company produced the following segment margin statement for the most recent period.

Division A Division B Total
Revenue $1,249,200 $1,873,800 $3,123,000
Variable Costs $569,000 $563,000 $1,132,000
Contribution Margin $680,200 $1,310,800 $1,991,000
Allocated Fixed Costs $567,200 $850,800 $1,418,000
Segment Margin $113,000 $460,000 $573,000

Fixed costs were allocated to the two divisions based on each divisions share of total revenue. For example the fixed cost allocated to Division A was ($1,249,200 / $3,123,000) $1,418,000.

The company president has just returned from a course where she heard about the notion of traceable fixed costs and common fixed costs. Upon investigation it was determined that only $212,700 of fixed costs were truly common costs. A further $1,134,400 of fixed costs were traceable: $226,880 to Division A and $907,520 to Division B. Finally, $70,900 of fixed costs were support costs that should be attributed to Division A and Davison B based on each divisions share of total revenue.

Recast the above exhibit to reflect the additional information provided about fixed costs.

Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number. Do not use the negative sign.

Division A Division B Total
Revenue $Answer $Answer $Answer
Variable Costs $Answer $Answer $Answer
Contribution Margin $Answer $Answer $Answer
Traceable Fixed Costs $Answer $Answer $Answer
Support Costs $Answer $Answer $Answer
Segment Margin $Answer $Answer $Answer
Common Fixed Costs $Answer
Income $Answer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Taxation Of Individuals And Business Entities 2016

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

7th Edition

9781259334870

Students also viewed these Accounting questions