Question

During april, division d of carney company had a segment margin ratio of 15%, a variable expense ratio of 60% of sales, and traceable fixed expenses of $15,000. division d's sales were closest to which of the following?

a) $22,500.
b) $33,333.
c) $60,000.
d) $100,000.

Answer 1

The sales for Division D can be calculated using the segment margin ratio and the variable expense ratio.

Step-by-step explanation:

Answer:

To find the sales for Division D, we need to calculate the total sales using the segment margin ratio and the variable expense ratio. The segment margin ratio is the percentage of sales that remain after deducting variable costs, and the variable expense ratio is the percentage of sales that variable expenses represent.

First, we need to find the contribution margin ratio, which is 1 minus the variable expense ratio. In this case, the contribution margin ratio is 1 - 0.60 = 0.40 (or 40%).

Now, we can calculate the total sales as follows:

Sales = Traceable fixed expenses / Contribution margin ratio

Sales = $15,000 / 0.40 = $37,500.

The closest value to $37,500 from the given options is $33,333 (option b). Therefore, the correct answer is

$33,333