Question

12. The Keystone Company has two divisions, A and B. Assume the following data for the two divisions for March: Division A Division B Sales $45,000 $80,000 Variable expenses as a percentage of sales 60% 80% Segment margin $5,000 $14,000 If total net income for the Keystone Company was $8,000, then how much were the total traceable and common fixed expenses for the Keystone Company

Answer 1

Answer:

The Keystone Company

The total traceable and common fixed expenses for the Keystone Company is:

$26,000

Explanation:

a) Data and Calculations:

Divisions                      A              B            Total

Sales                      $45,000    $80,000   $125,000

Variable expenses   60%          80%

Variable expense   27,000      64,000         91,000

Contribution          $18,000    $16,000       $34,000

Traceable fixed

 expense                13,000       2,000          15,000

Common fixed expense                                  ?

Total net income     5,000       14,000           8,000

The common fixed expense = $11,000

Total traceable and common fixed expenses = $26,000 ($34,000 - 8,000)