The two top selling segments of the Small Adorable Animal Depot are the Bunny segment and the Sloth segment. The Bunny segment sold 5,000 units while the Sloth segment sold 6,200 units in the prior period. The Bunny segment generated $210,000 of sales revenue and the Sloth segment generated $185,000 of sales revenue. The following information is available for the company's prior period:

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 16E
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The two top selling segments of the Small Adorable Animal Depot are the Bunny segment and the
Sloth segment. The Bunny segment sold 5,000 units while the Sloth segment sold 6,200 units in
the prior period. The Bunny segment generated $210,000 of sales revenue and the Sloth segment
generated $185,000 of sales revenue. The following information is available for the company's prior
period:
CM%
Total Fixed Costs
Period Costs
Product Costs
Bunny
35%
$87,000
$69,000
$18,000
Sloth
45%
Which of the following statements is correct?
$65,000
$15,000
$50,000
Of the Total Fixed Costs, 22% are direct fixed costs. The remaining Fixed Costs are common fixed
costs that have been allocated to their respective segments.
The Sloth segment should be evaluated on a segment margin of $68,950.
Operating income for the Bunny segment is $1,360.
Total segment margin for both the Bunny and Sloth segments is $4,750.
Total operating income for the period is $86,250.
Total traceable costs total $14,300 for the Sloth segment.
Transcribed Image Text:The two top selling segments of the Small Adorable Animal Depot are the Bunny segment and the Sloth segment. The Bunny segment sold 5,000 units while the Sloth segment sold 6,200 units in the prior period. The Bunny segment generated $210,000 of sales revenue and the Sloth segment generated $185,000 of sales revenue. The following information is available for the company's prior period: CM% Total Fixed Costs Period Costs Product Costs Bunny 35% $87,000 $69,000 $18,000 Sloth 45% Which of the following statements is correct? $65,000 $15,000 $50,000 Of the Total Fixed Costs, 22% are direct fixed costs. The remaining Fixed Costs are common fixed costs that have been allocated to their respective segments. The Sloth segment should be evaluated on a segment margin of $68,950. Operating income for the Bunny segment is $1,360. Total segment margin for both the Bunny and Sloth segments is $4,750. Total operating income for the period is $86,250. Total traceable costs total $14,300 for the Sloth segment.
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