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The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions: Revenues Variable operating expenses Controllable fixed expenses
The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions: Revenues Variable operating expenses Controllable fixed expenses Noncontrollable fixed expenses Los Bay Central Restin, Angeles Area Valley Inc. Division Division Division $750,000 $200,000 $235,000 $325,000 410.000 110.000 120,000 180,000 210,000 65,000 75,000 70,000 60,000 15,000 20,000 25,000 In addition, the company incurred common fixed costs of $18,000. Assume that the Los Angeles division increases its promotion expense, a controllable fixed cost, by $10,000. As a result, revenues increased by $50,000. If variable expenses are tied directly to revenues, the new Los Angeles segment profit margin is: Select one: O a. $12,500. O b. $22,500. c. $32,500. d. $50,000. e. $60,000
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