Question

Memuru Company has the following information pertaining to its two divisions for last year:Division X Division YVariable selling and admin. expenses $ 90,000 $ 100,000Direct fixed expenses 40,000 75,000Sales 500,000 600,000Direct fixed S&A expenses 45,000 80,000Variable expenses 66,000 85,000Common expenses are $30,000 for the year.What is the segment margin for Division Y?
a. $320,000b. $450,000c. $560,000d. $260,000

Answer 1

Answer:

segment margin for Division Y  = $260,000

so correct option is d. $260,000

Explanation:

given data

                                               Division X          Division Y

Variable and admin exp      $90,000              $100,000

Direct fixed expenses          40,000                    75,000

Sales                                     500,000                  600,000

Direct fixed S&A expenses  45,000                    80,000

Variable expenses                66,000                   85,000

Common expenses = $30,000

to find out

segment margin for Division Y

solution

we get here Segment margin for Y that is express as

Segment margin  = Sales - Variable expenses - Variable selling and admin exp - Direct fixed expenses - Direct fixed selling and admin expenses   ..............1

put here value we get

Segment margin  = $600,000 − $85,000 − $100,000 − $75,000 − $80,000

segment margin for Division Y  = $260,000

so correct option is d. $260,000