Answer:
HORATIO INC.
DIVISIONAL PERFORMANCE STATEMENT
Women's shoes Men's shoe Children's shoe
Sales $750,000 $562,500 (6)$537,500
less: Variable Cost (2) <u> </u><u>412,500</u> <u> 400,000 </u> <u> 312,500</u>
Contribution margin 337,500 (3) 162,500 225,000
Controllable fixed cost <u> 125,000 </u> (4)<u> 50,000</u> (5)<u> </u><u>106,250</u>
Controllable margin (1)<u> 212,500</u><u> </u> <u> 112,500 </u> <u> 118,750</u>
Workings
1. controllable margin = contribution margin - controllable fixed cost
= 337,500 - 125,000 = 212,500
2. contribution margin = sales - varable cost
337,500 = 750,000 - variable cost
variable cost = 750,000 - 337,500 = 412,500
3. contibution margin = 562,500 - 400,000 = 162,500
4. controllable fixed cost = contribution margin - controllable margin
= 162,500 - 112,500 = 50,000
5. controllable fixed cost = 225,000 - 118750 = 106,250
6. sales = contribution margin + variable cost
= 312,500 + 225,000 = 537,500
Explanation: