Question

12. The Keystone Company has two divisions, A and B. Assume the following data for the two divisions for March: Division A Division B Sales $45,000 $80,000 Variable expenses as a percentage of sales 60% 80% Segment margin $5,000 $14,000 If total net income for the Keystone Company was $8,000, then how much were the total traceable and common fixed expenses for the Keystone Company

Answer 1

The Keystone Company

The total traceable and common fixed expenses for the Keystone Company is:

$26,000

Step-by-step explanation:

a) Data and Calculations:

Divisions A B Total

Sales $45,000 $80,000 $125,000

Variable expenses 60% 80%

Variable expense 27,000 64,000 91,000

Contribution $18,000 $16,000 $34,000

Traceable fixed

expense 13,000 2,000 15,000

Common fixed expense ?

Total net income 5,000 14,000 8,000

The common fixed expense = $11,000

Total traceable and common fixed expenses = $26,000 ($34,000 - 8,000)