The Following Data Relate to Department No On the Basis of This Information, Department No

question 63

Multiple Choice

The following data relate to Department no. 3 of Tsing Corporation: $\begin{array}{lr}\text { Segment contribution margin } & \$ 540,000 \\\text { Profit margin controllable by the segment manager } & 310,000 \\\text { Segment profit margin } & 150,000\end{array}$ On the basis of this information, Department no. 3's variable operating expenses are:

• A) $80,000.
• B) $160,000.
• C) $230,000.
• D) $390,000.
• E) not determinable.

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Definitions:

Retail Inventory Method

An accounting method used by retailers to estimate inventory cost by calculating a cost-to-retail ratio.

FOB Destination

FOB Destination is a shipping term indicating the seller bears the shipping costs and maintains ownership until the goods reach the buyer's location.

Periodic Inventory System

An inventory accounting system where the inventory balance is updated at specific intervals, rather than continuously.

Retained Earnings

The portion of net income that is not distributed to shareholders but is kept by the company to be reinvested in its core business or to pay debt.