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Ace Company Sells a Variety of Merchandise and Wants to Evaluate

Question 51

Multiple Choice

Ace Company sells a variety of merchandise and wants to evaluate contribution margin by product line for Plumbing,Outdoor Products,and Hardware departments.Gross profit for each of these departments was $285,000;$78,000 and $137,000 respectively.Direct expenses for each department respectively were $122,000;$34,000;and $64,000.Indirect expenses were allocated to each department based on 70% of the direct expense for each segment.The contribution margin of Plumbing was:


A) $163,000.
B) $77,600.
C) $20,200.
D) $28,200.

Correct Answer:

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