Pepper’s Automotive produces auto parts for various automotive retailers. Pepper’s is evaluating the exhaust system division of the company and has come up with the following data for the year: net revenues are $1,270,000, variable costs are $426,000, and fixed costs are $517,000. Of the fixed costs, controllable fixed costs are $118,000 and noncontrollable fixed costs are $399,000. What are the controllable margin and total contribution by profit center (CPC), respectively?

Pepper’s Automotive produces auto parts for various automotive retailers. Pepper’s is evaluating the exhaust system division of the company and has come up with the following data for the year: net revenues are $1,270,000, variable costs are $426,000, and fixed costs are $517,000. Of the fixed costs, controllable fixed costs are $118,000 and noncontrollable fixed costs are $399,000. What are the controllable margin and total contribution by profit center (CPC), respectively?

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 18E

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What are the controllable margin and total contribution by profit center (CPC), respectively?

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Controllable margin: $726,000; CPC: $445,000
Controllable margin: $844,000; CPC: $327,000
Controllable margin: $844,000; CPC: $118,000
Controllable margin: $726,000; CPC: $327,000

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