Question

Franklin, Inc. has two divisions, Seward and Charles. Following is the income statement for the previous year: Seward Charles Sales $ 600,800 $ 400,900 Variable Costs 196,000 250,900 Contribution Margin $ 404,800 $ 150,000 Fixed Costs 175,900 170,700 Profit Margin $ 228,900 $ (20,700 ) Of the total fixed costs, $300,900 are common fixed costs that are allocated equally between the divisions. How much did the Charles division incur in direct fixed costs

Answer 1

Answer:

The amount incurred by Charles division in the direct fixed cost is $20,250

Explanation:

The computation of the amount incurred in the direct fixed cost is shown below:

Direct fixed cost is

= Charled fixed cost - common fixed cost ÷ 2

= $170,700 - ($300,900) ÷ 2

= $170,700 - $150,450

= $20,250

hence, the amount incurred by Charles division in the direct fixed cost is $20,250

We simply applied the above formula so that the correct value could come

And, the same is to be considered