The following information was taken from the segmented income statement of Maniraguha plc, and the company's three divisions: Maniraguha, Incorporated eastern Division western Division central Division Revenues $ 1,120,000 $ 320,000 $ 355,000 $ 445,000 Variable operating expenses 626,000 176,000 195,000 255,000 Controllable fixed expenses 255,000 80,000 90,000 85,000 Noncontrollable fixed expenses 105,000 30,000 35,000 40,000 In addition, the company incurred common fixed costs of $22,500. Assume that the eastern division increases its promotion expense, a controllable fixed cost, by $23,500. As a result, revenues increased by $64,000. If variable expenses are tied directly to revenues, what is the new Eastern division segment profit margin?
The following information was taken from the segmented income statement of Maniraguha plc, and the company's three divisions: Maniraguha, Incorporated eastern Division western Division central Division Revenues $ 1,120,000 $ 320,000 $ 355,000 $ 445,000 Variable operating expenses 626,000 176,000 195,000 255,000 Controllable fixed expenses 255,000 80,000 90,000 85,000 Noncontrollable fixed expenses 105,000 30,000 35,000 40,000 In addition, the company incurred common fixed costs of $22,500. Assume that the eastern division increases its promotion expense, a controllable fixed cost, by $23,500. As a result, revenues increased by $64,000. If variable expenses are tied directly to revenues, what is the new Eastern division segment profit margin?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information was taken from the segmented income statement of Maniraguha plc, and the company's three divisions:
Maniraguha, Incorporated | eastern Division | western Division | central Division | |
---|---|---|---|---|
Revenues | $ 1,120,000 | $ 320,000 | $ 355,000 | $ 445,000 |
Variable operating expenses | 626,000 | 176,000 | 195,000 | 255,000 |
Controllable fixed expenses | 255,000 | 80,000 | 90,000 | 85,000 |
Noncontrollable fixed expenses | 105,000 | 30,000 | 35,000 | 40,000 |
In addition, the company incurred common fixed costs of $22,500.
Assume that the eastern division increases its promotion expense, a controllable fixed cost, by $23,500. As a result, revenues increased by $64,000. If variable expenses are tied directly to revenues, what is the new Eastern division segment profit margin?
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