Daytona Company operates three divisions, L, M, and Z. The following information

Question

 Daytona Company operates three divisions, L, M, and Z. The following information is available for the most recent month:  Daytona Company: Variable costs .............    $281,000 Common fixed costs .........    $ 92,000 Net income .................    $136,000  Division L: Traceable fixed costs ......    $ 28,000  Division M: Sales revenue ..............    $190,000 Contribution margin ........    $ 57,000 Segment margin .............    $ 46,000  Division Z: Variable costs .............    $ 92,000 Variable costs .............    40% of sales Segment margin .............    $106,000  Calculate the sales revenue reported by Division L during the most recent month.

Explanation / Answer

CALCULATION OF THE REVENUE OF DIVISION Z Sales = Variable Cost X 100/40 = $ 92,000 X $ 100/40 = $               2,30,000 CALCULATION OF THE SALES REVENUE OF THE Daytona Company Net income = $               1,36,000 Add: Variable Cost $               2,81,000 Add: Common Fixed Cost = $                  92,000 Add: Traceable Fixed cost Dept. L= $                  28,000 Total Revenue = $               5,37,000 CALCULATION OF THE REVENUE OF THE DEPARTMENT L Sales Revernue of the company= $               5,37,000 Less: Sales revnue of the department Z = $               2,30,000 Less: Sales revnue of the department M = $               1,90,000 Balance is the revenue of the Department L $               1,17,000 Answer = $ 117,000

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