Carter Industries Has Two Divisions: the West Division and the East

question 106

Multiple Choice

Carter Industries has two divisions: the West Division and the East Division. Information relating to the divisions for the year just ended is as follows:
$\begin{array}{lrr}&\text { West}& \text { East }\\ \text {Units produced and sold } &30,000&40,000\\ \text {Selling price per unit } &\$8&\$15\\ \text { Variable costs per unit } &3&15\\ \text { Direct fixed cost } &48,000&110,000\\ \text { Common fixed cost } &40,000&40,000\\\end{array}$

Common fixed expenses have been allocated equally to each of the two divisions. Carter's segment margin for the West Division is:

• A) $150,000.
• B) $102,000.
• C) $30,000.
• D) $110,000.

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