Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $49,700 for Division A. Division B had a contribution margin ratio of 20% and its sales were $296,000. Net operating income for the company was $33,800 and traceable fixed expenses were $56,100. Corbel Corporation's common fixed expenses were:
A) $19,000
B) $56,100
C) $75,100
D) $108,900

Question

Quizplus · Accepted Answer

To find the common fixed expenses, first calculate the total contribution margin. Division B's contribution margin is 20% of $296,000 = $59,200. The total contribution margin is $49,700 (Division A) + $59,200 (Division B) = $108,900. Subtract the traceable fixed expenses ($56,100) and the net operating income ($33,800) from the total contribution margin to find the common fixed expenses: $108,900 - $56,100 - $33,800 = $19,000.

Corbel Corporation Has Two Divisions: Division a and Division B