Valley inc. has three divisions, Almond, Grover and Oak Following is the income

Question

Valley inc. has three divisions, Almond, Grover and Oak Following is the income statement for the previous year Oak Total Variable Costs Contribution Margin Fixed Costs Profit Margin Almond Grover 492,000 S 274,500 229,000 995,500 179,000 124800 00000 403,800 313,000 149,700 129,000 274.000 167,250 105,750 547,000 39,000 S (17.550) S 23.250 44.700 Of the fixed costs, $315,000 is for corporate costs and is allocated equally to the three divisions a. How much does Grover Division have in direct fixed costs? Fixed Costs b. What is Grover Division's segment margin? ment Mar

Explanation / Answer

a Fixed costs = 167250-(315000/3)= 62250 b Segment margin = 149700-62250= 87450 c Profit margin = 44700-87450= -42750

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