The following information is available for Bargain Books and its two divisions,Textbooks and Fiction Books.
$\begin{array}{lll}
&\text { Whole } && \text { fiction } & \
&\text { Company } & \text { textbooks } & \text { books }\
\text { Net sales }&\$100,000&\$60,000&\$40,000
\end{array}$
Fixed costs controllable by
$\begin{array}{lll}
\text { Division Manager }&16,500 & 12,500 & 4,000 \
\text { Fixed costs controlled by others }&8,000 & 5,000 & 3,000
\end{array}$
Variable costs:
$$\begin{array} { l l l l }
\text { Cost of merchandise sold } & 24,500 & 17,500 & 7,000 \
\text { Operating expenses } & 16,400 & 10,000 & 6,400 \
\text { Unallocated costs } & \text { B,000 } & &
\end{array}$$
What is the contribution by segment for the Textbooks Division?
A) $15,000
B) $20,000
C) $32,500
D) $42,500

Question

The following information is available for Bargain Books and its two divisions,Textbooks and Fiction Books.
$\begin{array}{lll}
&\text { Whole } && \text { fiction } & \
&\text { Company } & \text { textbooks } & \text { books }\
\text { Net sales }&\$100,000&\$60,000&\$40,000
\end{array}$
Fixed costs controllable by
$\begin{array}{lll}
\text { Division Manager }&16,500 & 12,500 & 4,000 \
\text { Fixed costs controlled by others }&8,000 & 5,000 & 3,000
\end{array}$
Variable costs:
$$\begin{array} { l l l l } 
\text { Cost of merchandise sold } & 24,500 & 17,500 & 7,000 \
\text { Operating expenses } & 16,400 & 10,000 & 6,400 \
\text { Unallocated costs } & \text { B,000 } & &
\end{array}$$
What is the contribution by segment for the Textbooks Division?
A) $15,000
B) $20,000
C) $32,500
D) $42,500

Quizplus · Accepted Answer

Contribution by segment for the Textbooks Division is calculated as follows:Net sales: $60,000Variable costs:Cost of merchandise sold: $17,500Operating expenses: $10,000Total variable costs: $27,500Contribution margin: $32,500

The Following Information Is Available for Bargain Books and Its