Question

The following data relate to Department no. 2 of Young Corporation:

Segment contribution margin $480,000
Profit margin controllable by the segment manager 226,000
Segment profit margin 108,000.
On the basis of this information, fixed costs traceable to Department no. 2 but controllable by others are:
a) $122,000
b) $140,000
c) $250,000
d) $370,000
e) not determinable.

Answer 1

e) not determinable.

Step-by-step explanation:

Calculation for the fixed costs traceable to Department no. 2 but controllable by others

Profit margin controllable by the segment manager 226,000

Less Segment profit margin (108,000)

Fixed costs traceable to Department no. 2 but controllable by others $118,000

(226,000-108,000)

Therefore the Fixed costs traceable to Department no. 2 but controllable by others are: $118,000