The contribution margin ratio of the Parts Department of Buffalo Valley Repair is 40 percent. Traceable fixed costs of the Parts Department average $80,000 per year, and the department's projected revenue for the upcoming year is $300,000 What is the department's expected responsibility margin in the upcoming year? Responsibility margin

The contribution margin ratio of the Parts Department of Buffalo Valley Repair is 40 percent. Traceable fixed costs of the Parts Department average $80,000 per year, and the department's projected revenue for the upcoming year is $300,000 What is the department's expected responsibility margin in the upcoming year? Responsibility margin

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4CDQ: How would each of the following costs be classified if units produced is the activity base? a....

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

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The contribution margin ratio of the Parts Department of Buffalo Valley Repair is 40 percent. Traceable fixed costs of the Parts
Department average $80,000 per year, and the department's projected revenue for the upcoming year is $300,000
What is the department's expected responsibility margin in the upcoming year?
Responsibility margin

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