The following information was taken from the segmented income statement of Restin, Inc.

In addition, the company incurred common fixed costs of $18,000.

    43.   Bay Area’s segment profit margin is:

            A.   $14,000.

            B.   $18,000.

            C.   $20,000.

            D.   $40,000.

            E.   $115,000.

Answer: C   

    44.   The profit margin controllable by the Central Valley segment manager is:

            A.   $32,000.

            B.   $44,000.

            C.   $50,000.

            D.   $75,000.

            E.   $145,000.

Answer: D 

    45.   Assuming use of a responsibility accounting system, which of the following amounts should be used to evaluate the performance of the Los Angeles division manager?

            A.   $4,000.

            B.   $8,000.

            C.   $10,000.

            D.   $25,000.

            E.   $90,000.

Answer: D   

    46.   Which of the following amounts should be used to evaluate whether Restin, Inc., should continue to invest company resources in the Los Angeles division?

            A.   $4,000.

            B.   $8,000.

            C.   $10,000.

            D.   $25,000.

            E.   $90,000.

Answer: C   

    47.   Assume that the Los Angeles division increases its promotion expense, a controllable fixed cost, by $10,000.  As a result, revenues increase by $50,000.  If variable expenses are tied directly to revenues, the new Los Angeles segment profit margin is:

            A.   $12,500.

            B.   $22,500.

            C.   $32,500.

            D.   $50,000.

            E.   $60,000.

Answer: B   

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