Question

The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions:

Restin, Los Angeles Bay Area Central Valley
Inc. Division Division Division
Revenues $1,168,000 $336,000 $371,000 $461,000
Variable operating expenses 654,800 184,800 205,000 265,000
Controllable fixed expenses 261,000 82,000 92,000 87,000
Noncontrollable fixed expenses 111,000 32,000 37,000 42,000

In addition, the company incurred common fixed costs of $23,100. Bay Area's segment profit margin is ________.

Answer 1

Bay area segment profit is $29,663

Step-by-step explanation:

Restin Los Angeles Bay Area Central valley

Revenue 1168000 336000 371000 461000

Variable 654800 184800 205000 265000

Controllable 261000 82000 92000 87000

N controllable 111000 32000 37000 42000

Fixed 23100 6645 7337 9118

Profit 118100 30555 29663 57882

Fixed cost is apportioned to each segment using the percentage revenue generated