Question

ABC Company sells three products, X, Y, and Z. During October,
Product X had sales of $500,000; Product Y had sales totaling
$300,000; and Product Z reported sales of $200,000. ABC Company
as a whole reported total fixed costs of $443,000, a total
segment margin of $77,000, and a net income of $53,000.
The traceable fixed costs for Product X amounted to $80,000
during October and the traceable fixed costs for Product Z
were $60,000 in October.

Calculate the traceable fixed costs reported by Division B
in October.

Answer 1

Calculation of Total common Expenses = Segment Margin - Net income => 77,000 - 53,000. = 24,000.

Product Y Traceable Fixed Cost :-

Total Expenses - Common Expenses - Traceable Expenses of product Y & Z.

=> $443,000 - 24,000 - 80,000 - 60,000 = $279,000.

Total Traceable Fixed Expenses = Fixed Traceable Expenses of Product X,Y & Z.

=> 80,000 + 60,000 + 279,000 = $419,000.

$419,000 Fixed expenses are reported by division B.

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