The Following Information Was Taken from the Segmented Income Statement

question 10

Multiple Choice

The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions: $\begin{array}{cccc} && \text { Los } & \text { Bay } & \text { Central } \\&\text { Restin, } & \text { Angeles } & \text { Area } & \text { Valley } \\&\text { Inc. } & \text { Division } & \text { Division } & \text { Division }\\\hline\text { Revenues } & \$ 750,000 & \$ 200,000 & \$ 235,000 & \$ 325,000 \\\text { Variable operating expenses } & 410,000 & 110,000 & 120,000 & 180,000 \\\text { Controllable fixed expenses } & 210,000 & 65,000 & 75,000 & 70,000 \\\text { Noncontrollable fixed expenses } & 60,000 & 15,000 & 20,000 & 25,000\end{array}$ In addition, the company incurred common fixed costs of $18,000.
Assume that the Los Angeles division increases its promotion expense, a controllable fixed cost, by $10,000. As a result, revenues increased by $50,000. If variable expenses are tied directly to revenues, the new Los Angeles segment contribution margin is:

• A) $12,500.
• B) $22,500.
• C) $32,500.
• D) $50,000.
• E) $60,000.

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Definitions:

Crash Duration

The shortest possible time for which an activity or project phase can be scheduled after allocating the maximum amount of resources.

Total Cost

The complete cost of producing or acquiring goods or services, including variable costs, fixed costs, and any other relevant expenses.

Network Diagram

A visual representation of a project's activities and their interdependencies, often used to plan and monitor project timelines.

Expected Duration

The anticipated amount of time which will elapse before a particular project or activity is completed.