The Gasson Company sells three products, Product A, Product B and Product C, and had sales of $1,000,000 during the month of June. The company's overall contribution margin ratio was 37% and fixed expenses totaled $350,000. Sales were: Product A, $500,000; Product B, $300,000; and Product C, $200,000. Traceable fixed costs were: Product A, $120,000; Product B, $100,000; and Product C, $60,000. The variable expenses of Product A were $300,000 and the variable expenses of Product B were $180,000.
-The common fixed expense for Gasson Company for the month of June was:
A)$350,000
B)$280,000
C)$70,000
D)$20,000

Question

Quizplus · Accepted Answer

Total traceable fixed expenses = $120,000 + $100,000 + $60,000 = $280,000
Common fixed expenses = Total fixed expenses - Total traceable fixed expenses
= $350,000 - $280,000 = $70,000

The Gasson Company Sells Three Products, Product A, Product B