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30 October, 17:59

Bergeron Corporation's Fine Furniture division reported a net operating income of $3,200,000 in the most recent reporting period. The division absorbed indirect fixed corporate expenses of $1,400,000. What was the division's controllable margin? A : $4,600,000 B : $2,300,000 C : $1,400,000 D : $1,800,000

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  1. 30 October, 20:47
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    The correct answer is D

    Explanation:

    The division controllable margin is computed with the formula is as:

    Division Controllable margin = Net Operating Income - Indirect fixed expense

    where the values

    Net Operating Income is $3,200,000

    Indirect fixed expense is $1,400,000

    Putting the values in the above formula:

    = $3,200,000 - $1,400,000

    = $1,800,000

    So, the division controllable margin amounts to $1,800,000
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