The following is a summarized income statement for McClaron Manor Co.'s profit center 12608 for April:
$\begin{array}{l}
\text { Contribution Margin }&&\$175,000\
\text { Period Expenses } & \$ 11,000\
\text { Manager' s Salary } & \$ 2,000 \
\text { Corporate Expense Allocation } & \$ 8,000&\$(21,000)\
\text { Net Income }&&\$154,000
\end{array}$
Which of the following amounts is most likely subject to the control of the profit center's manager? (CPA, adapted)
A) Contribution Margin of $175,000.
B) Contribution Margin of $175,000 and Period Expenses of $11,000.
C) Contribution Margin of $175,000 and Period Expenses of $13,000.
D) Contribution Margin of $175,000 and Period Expenses of $21,000.

Question

Quizplus · Accepted Answer

The profit center manager typically has control over the contribution margin, which is the difference between sales and variable costs. Period expenses, manager's salary, and corporate expense allocations are usually not under the direct control of the profit center manager.

The Following Is a Summarized Income Statement for McClaron Manor