Question

Canada Company had the following operating data for the year for its computer division: sales, $650,000; contribution margin, $140,000; total fixed costs (controllable), $100,000; and average total operating assets, $280,000. What is the controllable margin for the year?

A. $140,000.
B. 50%.
C. $40,000.
D. 14.3%.

Answer 1

C

Step-by-step explanation:

In this question, we are asked to calculate the controllable margin.

Mathematically, the controllable margin = Contribution margin - controllable fixed cost

From the question, we can identify that the contribution margin is $140,000 while the controllable fixed cost is $100,000

The controllable margin is thus; $140,000 - $100,000 = $40,000