All other things equal, if a division's traceable fixed expenses increase: A) the division's segment margin...
All other things equal, if a division's traceable fixed expenses increase:
A) the division's segment margin will increase.
B) the overall company net operating income will decrease.
C) the division's contribution margin will decrease.
D) the division's sales volume will increase.
Homework Answers
All other things equal, if a division's traceable fixed expenses increase, the divisions segment margin will decrease.
Increase in division's traceable fixed expenses will have no effect on division's sales volume or contribution margin.
Other division's segment margin will not be effected but the overall net operating income of the company will decrease.
Correct option is B.
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All other things equal, if a division's traceable fixed expenses
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Shannon Company segments its income statement into its North and South Divisions. The company's overall sales, contribution margin ratio, and net operating income are $1,020,000, 38%, and $20,400, respectively. The North Division's contribution margin and contribution margin ratio are $142,800 and 42%, respectively. The South Division's segment margin is $163,200. The company has $244,800 of common fixed expenses that cannot be traced to either division. 3.07 points Required: Prepare an income statement for Shannon Company that uses the contribution format...
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