Canon Company Has Two Sales Areas: North and South

Multiple Choice

Canon Company has two sales areas: North and South. During last year, the contribution margin in the North was $50,000, or 20% of sales. The segment margin in the South was $15,000, or 8% of sales. Traceable fixed costs were $15,000 in the North and $10,000 in the South. During last year, the company reported total operating income of $26,000.


-What were the variable costs for the South area for the year?

A) $65,000.
B) $162,500.
C) $185,000.
D) $230,000.