Pippen CoRecorded Operating Data for Its Shoe Division for the Year

question 142

Multiple Choice

Pippen Co.recorded operating data for its shoe division for the year.The company's desired return is 5%. $\begin{array}{lr}\text { Sales } & \$ 1,000,000 \\\text { Contribution margin } & 200,000 \\\text { Total direct fixed costs } & 120,000 \\\text { Average total operating assets } & 400,000\end{array}$ Which one of the following reflects the controllable margin for the year?

• A)20%
• B)50%
• C)$60,000
• D)$80,000

---

Definitions:

Financing Activities

Financing Activities involve transactions between a company and its investors or creditors that affect the equity and debt of the business, including issuing stock, paying dividends, and borrowing money.

Common Stock

equity securities that represent ownership in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and/or capital appreciation.

Investing Activities

Transactions related to the acquisition or disposal of non-current assets, including securities, property, and equipment.

Net Cash Provided

The amount of cash generated by a company, typically from operating, investing, and financing activities, minus cash outflows.