Koala Ltd has only two divisions: A and B. The following data apply to Division A. Fixed

Question:

Koala Ltd has only two divisions: A and B. The following data apply to Division A.

Fixed costs controllable outside division......................................... €100000

Net revenues......................................................................... 1500000

Variable marketing and administrative expenses............................... 200000

Total traceable costs............................................................... 1000000

Total variable costs............................................................... 600 000

Required

1. Prepare a segment report for Division A that differentiates between the performance of the manager and the performance of the division.

2. Division B's net revenue is €3 million and its contribution margin is €1.2 million. The segment margin (contribution by division of Division B) is €700 000.

a. Determine fixed costs traceable to Division B.

b. Determine variable costs of Division B.

3. Koala's corporate costs unallocated to divisions are €400000. Determine Koala's income.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...