Namco Inc. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October:   Direct Labor:                 $25/unit Direct Materials:                 $80/unit Variable Overhead:         $15/unit Traceable Fixed Costs:  $62,000 Common Fixed Costs:       $100,000   Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000.    By how much did the department margin increase or decrease in October?   Select one: a. $100,000 decrease b. $18,000 increase c. $82,000 decrease d. $118,000 increase e. $80,000 increase

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Namco Inc. is a large company that segments its business into cost and profit centers. The Cost center for the manufacture of Product M2T incurred the following costs in October:

 

Direct Labor:                 $25/unit

Direct Materials:                 $80/unit

Variable Overhead:         $15/unit

Traceable Fixed Costs:  $62,000

Common Fixed Costs:       $100,000

 

Sales were 2,000 units in October. Each unit sells for $210. The M2T Department is being evaluated on overall profitability. In September, the department margin was $100,000. 

 

By how much did the department margin increase or decrease in October?

 

Select one:
a. $100,000 decrease
b. $18,000 increase
c. $82,000 decrease
d. $118,000 increase
e. $80,000 increase
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