City Retail Sells Two Products: Standard and Deluxe

question 191

Short Answer

City Retail sells two products: Standard and Deluxe.The company had sales of $800,000 during the current year.The company's contribution margin ratio was 40% and total fixed costs totaled $300,000.Sales were $600,000 for Standard and $200,000 for Deluxe.Traceable fixed costs were $150,000 for Standard and $90,000 for Deluxe.Variable costs were $360,000 for Standard and $120,000 for Deluxe.What is the segment margin for the Deluxe product?
a.$10,000
b.$10,000
c.$20,000
d.$80,000

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Definitions:

Repetitive Focus

A manufacturing strategy that emphasizes producing large volumes of the same product or service, aiming for efficiency and consistency in output.

Cross-Over Point

The point at which two different options or systems result in the same level of cost or benefit, making them equally preferable under the conditions given.

Variable Cost

Costs that vary in direct proportion to changes in the level of production or activity, such as materials and labor.

Highly Automated

Systems or processes that operate with minimal human intervention, utilizing advanced technology and machinery for efficiency and precision.