Exercise 22-15 (Part Level Submission) Horatio Inc. has three divisions which ar

Question

Exercise 22-15 (Part Level Submission)

Horatio Inc. has three divisions which are operated as profit centers. Actual operating data for the divisions listed alphabetically are as follows.

(a)

Operating Data

Women’s Shoes

Men’s Shoes

Children’s Shoes

$333,180

$222,120

123,400

111,060

117,230

740,400

555,300

308,500

Exercise 22-15 (Part Level Submission)

Horatio Inc. has three divisions which are operated as profit centers. Actual operating data for the divisions listed alphabetically are as follows.

Explanation / Answer

Operating Data Women’s Shoes Men’s Shoes Children’s Shoes Contribution margin $333,180 555,300 - 394,880 = $160,420 $222,120 Controllable fixed costs 123,400 $160,420 - 111,060 = $49,360 $222,120 - 117,230 = $104,890 Controllable margin $333,180 - 123,400 = $209,780 111,060 117,230 Sales 740,400 555,300 $222,120 + 308,500 = $530,620 Variable costs 740,400 - 333,180 = $407,220 394,880 308,500

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