The Gasson Company sells three products, Product A, Product B and Product C, and

Question

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: 1) $350,000.
2) $280,000.
3) $70,000.
4) $20,000.

Explanation / Answer

Common Fixed Expense
Total Fixed Cost                                  $350,000
Less: Traceable FC
        (120T+100T+60T)                       $280,000
Common Fixed Cost                           $70,000

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