Consider the Following Portion of a Segmented Income Statement for the Year

question 42

Multiple Choice

Consider the following portion of a segmented income statement for the year just ended. Assume that the fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses. $$\begin{array} { l r } & \text { Division } x \\\text { Sales } & \$ 100,000 \\\text { Variable manufacturing costs } & 60,000 \\ \text { Gross profit }& \$ 40,000 \\\text { Fixed expenses (direct and allocated) }& 50,000 \\\text { Operating income (loss) } & \$ ( 10,000 ) \end{array}$$ What is X's divisional segment margin?

---

Definitions:

Referent Power

Power derived from being well liked by others.

Legitimate Power

A form of authority where power is granted through societal structures, titles, or positions, deemed appropriate and recognized by those governed.

Employee Effectiveness

The extent to which employees successfully achieve the goals and objectives of the organization.

Power Holder

An individual or group that possesses and exercises authority or influence over others in a particular context.