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PROFIT CENTER:
The Asian Regional Division of a large manufacturing corporation has sales of P1,200,000, cost of sales of P720,000, division manager controllable operating expenses of P100,000, other traceable division operating expenses of P44,000, and allocated fixed costs of P120,000. The cost of sales is 70% variable while the remaining 30% is depreciating expenses which related to equipment purchased before the current manager. Division traceable operating expenses are 60% fixed.
SHOW SOLUTIONS
A. How much is the contribution margin from this Division?
B. How much is the margin that will be used to measure the performance of the manager?
C. How much is the division margin?
D. Assuming that there will be no changes in cost assumptions, how much would the margin provided by the Asian Regional Division be if sales increased by 10%
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