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problem: Azuki Corporation operates in two sales territories, urban and rural. Shown below is last year's income statement segmented by territory:

 

Urban

Rural

Sales

$320,000

$80,000

Variable expenses

208,000

56,000

Contribution margin

112,000

24,000

Traceable fixed expenses

48,000

30,000

Segment margin

$64,000

$(6,000)

Azuki's common fixed expenses were 25,000 dollar last year. If urban sales were ten percent higher last year, by approximately how much would Azuki's net operating income have raised? [Suppose no change in the revenue or cost structure.]

[A] $4,400

[B] $6,400

[C] $11,200

[D] $32,000

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M917713

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