Pepper’s Automotive produces auto parts for various automotive retailers. Pepper’s is evaluatingthe exhaust system division of the company and has come up with the following data for the year:net revenues are $1,000,000, variable costs are $300,000, and fixed costs are $400,000. Of the fixedcosts, controllable fixed costs are $100,000 and noncontrollable fixed costs are $300,000. What arethe controllable margin and total contribution by profit center (CPC), respectively?a. Controllable margin: $600,000; CPC: $400,000b. Controllable margin: $700,000; CPC: $300,000c. Controllable margin: $700,000; CPC: $100,000d. Controllable margin: $600,000; CPC: $300,000

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Pepper’s Automotive produces auto parts for various automotive retailers. Pepper’s is evaluating
the exhaust system division of the company and has come up with the following data for the year:
net revenues are $1,000,000, variable costs are $300,000, and fixed costs are $400,000. Of the fixed
costs, controllable fixed costs are $100,000 and noncontrollable fixed costs are $300,000. What are
the controllable margin and total contribution by profit center (CPC), respectively?
a. Controllable margin: $600,000; CPC: $400,000
b. Controllable margin: $700,000; CPC: $300,000
c. Controllable margin: $700,000; CPC: $100,000
d. Controllable margin: $600,000; CPC: $300,000

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