Pippen Co. recorded operating data for its shoe division for the year. The company's desired return is 5%. Sales $ 1 , 000 , 000 Contribution margin 200 , 000 Total direct fixed costs 120 , 000 Average total operating assets 400 , 000 \begin{array} { l r } ext { Sales } & \$ 1,000,000 \ ext { Contribution margin } & 200,000 \ ext { Total direct fixed costs } & 120,000 \ ext { Average total operating assets } & 400,000\end{array} Sales Contribution margin Total direct fixed costs Average total operating assets $1 , 000 , 000 200 , 000 120 , 000 400 , 000 Which one of the following reflects the controllable margin for the year?A) 20%B) 50%C) $60000D) $80000

Question

Pippen Co. recorded operating data for its shoe division for the year. The company's desired return is 5%.    Sales  $ 1 , 000 , 000  Contribution margin  200 , 000  Total direct fixed costs  120 , 000  Average total operating assets  400 , 000 \begin{array} { l r } 	ext { Sales }  &  \$ 1,000,000 \	ext { Contribution margin }  &  200,000 \	ext { Total direct fixed costs }  &  120,000 \	ext { Average total operating assets }  &  400,000\end{array}  Sales   Contribution margin   Total direct fixed costs   Average total operating assets  ​ $1 , 000 , 000 200 , 000 120 , 000 400 , 000 ​   Which one of the following reflects the controllable margin for the year?A)  20%B)  50%C)  $60000D)  $80000

Gavin Bergeron · Accepted Answer

Final Answer : D, Explanation :  The controllable margin is calculated as the contribution margin minus the total direct fixed costs: $200,000 - $120,000 = $80,000.

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