The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions: In addition, the company incurred common ﬁxed costs of $18,000. Assume that the Los Angeles division increases its promotion expense, a controllable ﬁxed cost, by $10,000.As a result, revenues increased by $50,000.If variable expenses are tied directly to revenues, the new Los Angeles segment proﬁt margin is:
A)$12,500.
B)$22,500.
C)$32,500.
D)$50,000.
E)$60,000.

Question

The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions:  In addition, the company incurred common ﬁxed costs of $18,000. Assume that the Los Angeles division increases its promotion expense, a controllable ﬁxed cost, by $10,000.As a result, revenues increased by $50,000.If variable expenses are tied directly to revenues, the new Los Angeles segment proﬁt margin is:
A)$12,500. 
B)$22,500. 
C)$32,500. 
D)$50,000. 
E)$60,000.

Quizplus · Accepted Answer

The Answer of The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions:  In addition, the company incurred common ﬁxed costs of $18,000. Assume that the Los Angeles division increases its promotion expense, a controllable ﬁxed cost, by $10,000.As a result, revenues increased by $50,000.If variable expenses are tied directly to revenues, the new Los Angeles segment proﬁt margin is:
A)$12,500. 
B)$22,500. 
C)$32,500. 
D)$50,000. 
E)$60,000.

The Following Information Was Taken from the Segmented Income Statement