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Ferrar Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below: Sales revenues, Consumer
Ferrar Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below:
Sales revenues, Consumer | $ | 680,000 | |||||||
Sales revenues, Commercial | $ | 280,000 | |||||||
Variable expenses, Consumer | $ | 394,000 | |||||||
Variable expenses, Commercial | $ | 143,000 | |||||||
Traceable fixed expenses, Consumer | $ | 102,000 | |||||||
Traceable fixed expenses, Commercial | $ | 45,000 | |||||||
In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment.
A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:
$276,000
$(144,000)
$423,000
$66,000
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