How much does gold division have in direct fixed costs

Reference no: EM131975748

Problem

Shirley Inc. has three divisions, King, West and Gold. Following is the income statement for the previous year:

	King		West		Gold			Total
Sales	$	983,000	$	575,500	$	426,000		$	1,984,500
Variable Costs		417,500		344,100		300,600			1,062,200
Contribution Margin		565,500		231,400		125,400			922,300
Fixed Costs		394,000		195,625		149,375			739,000
Profit Margin	$	171,500	$	35,775	$	(23,975	)	$	183,300

Of the fixed costs, $324,000 is for corporate costs and is allocated equally to the three divisions.

a. How much does Gold Division have in direct fixed costs?
b. What is Gold Division's segment margin?
c. What would Shirley's profit margin be if Gold Division were dropped?

Reference no: EM131975748

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