The Following Information Is Available for Paperback Inc Unallocated Costs 7,000 _____ Is the Contribution Margin for the Divisions

question 47

Multiple Choice

The following information is available for Paperback Inc.and its two divisions, Books and Periodicals: $\begin{array}{cccc}&\text { Company } & \text { Books } & \text { Periodicals } \\&\text { as a whole } & \text { Division } & \text { Division }\\\hline\text { Net sales } & \$ 100,000 & \$ 60,000 & \$ 40,000\\\text { Fixed costs: }\\\text { Controllable by }\\\text { division manager } & 16,500 & 12,500 & 4,000 \\\text { Controllable by others } & 8,000 & 5,000 & 3,000 \\\text { Variable costs: } & & & \\\text { Cost of merchandise sold } & 24,500 & 17,500 & 7,000 \\\text { Operating expenses } & 16,400 & 10,000 & 6,400\\\text { Unallocated costs }&1,000\end{array}$ Unallocated costs 7,000 _____ is the contribution margin for the Books Division.

• A)$32,500
• B)$42,500
• C)$20,000
• D)$15,000

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Definitions:

Credit Card Sales

Transactions where the purchases are made by consumers using credit cards.