The Following Information Is Available for Yorkshire Consulting Company and Its

question 149

Essay

The following information is available for Yorkshire Consulting Company and its two offices: $\begin{array}{lll}&\text { Berea Office }&\text { North Royalton Office}\\\text { Net sales }&\$250,000&\$400,000\\\text { Fixed costs: Controllable }\text { by }\\\text { division manager } & 78,000 & 48,000 \\\text { Controllable by others } & 4,000 & 8,000 \\\text { Variable costs: } & &\\\text { Cost of }\\\text { merch andise sold } & 30,000 & 120,000 \\\text { Operating expenses } & 15,000 & 60,000\end{array}$ Unallocated costs were $52,000. Required:
a. Compute the contribution margin for the Berea Office.
b. Compute the contribution controllable by the manager of the North Royalton Office.
c. Compute the contribution by segment for the Berea Office.
d. Compute the net income for Yorkshire Consulting Company.

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Definitions:

Economic Profit

The difference between total revenues and total costs, including both explicit and implicit costs.

Allocation of Resources

The process of distributing scarce resources among different uses and users.

Resource Use

The manner in which natural resources are exploited and utilized to meet human needs or economic applications.

Economic Profit

The difference between the total revenue generated by a business and the total costs, both explicit and implicit, including opportunity costs.