Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 42

Calabria Healthcare supplies prescription drugs to pharmacies. As the management accountant, you are required to analyze the financial statements for this quarter. You already have analyzed the company's two divisions, Name Brand and Generic, and your supervisor wants an analysis of the comparable profitability of the SBUs. The contribution margins are $500,000 and $200,000, respectively; the controllable fixed costs are $200,000 and $50,000; and the noncontrollable fixed costs are $50,000 and $100,000. What are the total contributions by profit center (CPC) for these divisions and operating income for the company Assume there are no untraceable fixed costs.