Marple Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-one in Houston and one in Dallas. The firm classifies the direct costs of consulting jobs as variable costs.
Assume that Dallas' sales by major market are as follows:
Market
Dallas Construction Clients Landscaping clients
Sales $660,000 100% $440,000 100% $220,000 100%
Variable Expenses 396,000 60 286,000 65 110,000 50
Contributioin Margin 264,000 40 154,00 35 110,000 50
Traceable fixed expenses 79,200 12 22,00 5 57,200 26
Market segment margin 184,800 28 132,000 30% 52,800 24%
common fixed expenses 19,800 3
not traceable to markets
office segment margin 165,000 25%