Question

Genuine Goods has two stores: East and West. During May, Genuine reported a net operating income of $50,000 and sales of $540,000. The contribution margin in Store East was $100,000, or 40% of sales. The segment margin in Store West was $45,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store East, and $40,000 in Store West. Genuine's total fixed expenses for the year were

Answer 1

the total fixed expense for the year is $145,000

Step-by-step explanation:

The computation of the total fixed expense for the year is shown below:

= (Store east fixed expense + store west fixed expense) + ((contribution margin - store east fixed expense) + net operating income - segment margin)

= ($60,000 + $40,000) + (($100,000 - $60,000) + $50,000 - $45,000

= $145,000

hence, the total fixed expense for the year is $145,000