Bergeron Corporation's Fine Furniture division reported a net operating income of $3,200,000 in the most recent reporting period. The division absorbed indirect fixed corporate expenses of $1,400,000. What was the division's controllable margin? A : $4,600,000 B : $2,300,000 C : $1,400,000 D : $1,800,000

Question

Eric Skinner

Business

6 April, 23:14

Bergeron Corporation's Fine Furniture division reported a net operating income of $3,200,000 in the most recent reporting period. The division absorbed indirect fixed corporate expenses of $1,400,000. What was the division's controllable margin? A : $4,600,000 B : $2,300,000 C : $1,400,000 D : $1,800,000

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Answers (1)

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Marcel Callahan · Answer 1

The correct answer is D

Explanation:

The division controllable margin is computed with the formula is as:

Division Controllable margin = Net Operating Income - Indirect fixed expense

where the values

Net Operating Income is $3,200,000

Indirect fixed expense is $1,400,000

Putting the values in the above formula:

= $3,200,000 - $1,400,000

= $1,800,000

So, the division controllable margin amounts to $1,800,000