A company has two divisions: A and B. Division A accounts for 60.0% of the companys total
Question:
A company has two divisions: A and B. Division A accounts for 60.0% of the company’s total sales. Division managers receive a bonus if their year-end segment performance margin is ≥18%. Information is given below:
Working together, the division managers want to raise their segment performance margins to 18% of sales by reclassifying some Traceable AND Controllable fixed expenses as common fixed expenses. The reclassification has no effect on the company's overall Net income.
Question: What are the total fixed expenses that must be reclassified as common if the managers are to receive their bonus?
a. $10,800
b. $22,800
c. $13,200
d. $25,200
e. None of the other answers are correct
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ