Michaels Company segments its income statement into its East and West Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $600,000, 50%, and $50,000, respectively. The West Division’s contribution margin and contribution margin ratio are $150,000 and 75%, respectively. The East Division’s segment margin is $70,000. The company has $60,000 of common fixed costs that cannot be traced to either division.

A company has four divisions. Division A has sales, variable expenses and traceable fixed expenses of 200,000, 103,000, 33,000, respectively. If the company as a whole has common fixed expenses of 50,000. What is division A’s segment Margin?

Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $43,000 for Division A. Division B had a contribution margin ratio of 30% and its sales were $240,000. Net operating income for the company was $35,200 and traceable fixed expenses were $50,400. Corbel Corporation's common fixed expenses were:

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Davenport Incorporated has two divisions, Howard and Jones. The following is the segmented income statement for the past month:   Howard Jones Total Sales revenue $ 800,000 $ 600,000 $ 1,400,000 Variable costs 400,000 480,000 880,000 Contribution margin $ 400,000 $ 120,000 $ 520,000 Direct fixed costs 200,000 100,000 300,000 Segment margin $ 200,000 $ 20,000 $ 220,000 Fixed costs (allocated) 150,000 150,000 300,000 Net operating income (loss) $ 50,000 $ (130,000) $ (80,000) What would Davenport's income (loss) be if the Jones Division was dropped?

ABCDE Inc. has three divisions: AB, CD, and E. All fixed costs are unavoidable. Following is the income statement for the previous year: AB CD E Total Sales $ 515,000 $ 274,500 $ 226,000 $ 1,015,500 Variable Costs 182,000 124,500 100,500 407,000 Contribution Margin 333,000 150,000 125,500 608,500 Fixed Costs (allocated) 272,000 165,250 112,750 550,000 Profit Margin $ 61,000 $ (15,250 ) $ 12,750 $ 58,500 a. What would company’s profit margin be if the CD division were dropped?

Couzen's Company’s cost structure is dominated by variable costs with a contribution margin ratio of 0.27 and fixed costs of $513,000. Every dollar of sales contributes 27 cents toward fixed costs and profit. The cost structure of a competitor, Jones & Family, is dominated by fixed costs with a higher contribution margin ratio of 0.77 and fixed costs of $2,650,500. Every dollar of sales contributes 77 cents toward fixed costs and profit. Both companies have sales of $4,275,000 annually. Required: Compare the two companies’ cost structures. Suppose that both companies experience a 12 percent decrease in sales volume. By how much would each company’s profits decrease?

VW Enterprises operates three product lines. The most recent product line (division) income statements are as follows: A Total Sales $ 1,250,000 $ 2,000,000 $ 1,750,000 $ 5,000,000 Variable expenses 1,000,000 1,700,000 1,312,500 4,012,500 Contribution margin (CM) Fixed expenses 250,000 300,000 437,500 987,500 500,000 400,000 120,000 1,020,000 Net income $ (250,000) $ (100,000) $ 317,500 $ (32,500) Sales mix 25.00% 40.00% 35.00% 100.00% CM ratio 20.00% 15.00% 25.00% With Product Lines A & B appearing unprofitable, VW has decided to add Product Line D which has an expected contribution margin ratio of 22.0%. VW management believes the addition of Product Line D will increase TOTAL sales to $6.0 million. The new Product D sales also will impact the sales of Products A, B & C. The revised sales mix shows; A=15%, B=45%, and C=30%, respectively. Product D accounts for the remaining sales. Additionally, the contribution margin ratio for Products A, B & C will remain constant. Of the original…