Insider Corporation has two divisions, J and K. During March, the contribution m
ID: 2423192 • Letter: I
Question
Insider Corporation has two divisions, J and K. During March, the contribution margin in Division J was $31,000. The contribution margin ratio in Division K was 40%, its sales were $126,000, and its segment margin was $33,000. The common fixed expenses in the company were $41,000, and the company's net operating income was $18,500. The segment margin for Division J was:
Insider Corporation has two divisions, J and K. During March, the contribution margin in Division J was $31,000. The contribution margin ratio in Division K was 40%, its sales were $126,000, and its segment margin was $33,000. The common fixed expenses in the company were $41,000, and the company's net operating income was $18,500. The segment margin for Division J was:
Explanation / Answer
Contribution Margin
31000
Contribution Margin Ratio
40%
Sales
126000
Segment Margin
33000
Fixed Cost
41000
Net Operating Income
18500
Contribution Margin of Division K = Sales* Contribution Ratio
=
126000*40%
50400
Total
31000+50400
Total Contribution Margin
81400
Less: Fixed Cost
-41000
Total Margin
40400
Fixed cost of K = 33000--18500
=14500
Fixed Cost of J
41000-14500
26500
Segment Margin
31000-26500
=
4500
Contribution Margin
31000
Contribution Margin Ratio
40%
Sales
126000
Segment Margin
33000
Fixed Cost
41000
Net Operating Income
18500
Contribution Margin of Division K = Sales* Contribution Ratio
=
126000*40%
50400
Total
31000+50400
Total Contribution Margin
81400
Less: Fixed Cost
-41000
Total Margin
40400
Fixed cost of K = 33000--18500
=14500
Fixed Cost of J
41000-14500
26500
Segment Margin
31000-26500
=
4500