Question

Power Manufacturing recorded operating data for its shoe division for the year. Sales $1,500,000 Contribution margin 300,000 Controllable fixed costs 180,000 Average total operating assets 600,000 How much is controllable margin for the year

Answer 1

Controllable margin for the year is $120,000.

Step-by-step explanation:

Controllable margin refers to contribution margin minus controllable fixed costs. Controllable margin is usually employed to assess the performance of managers because all the costs that the profit center manager can control are included in the calculation of controllable margin.

Based on the explanation above, controllable margin for this question can therefore be calculated as follows:

Controllable margin = Contribution margin - Controllable fixed costs = $300,000 - $180,000 = $120,000

Therefore, controllable margin for the year is $120,000.