Question
Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $250,000, variable expenses of $140,000, and
Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $250,000, variable expenses of $140,000, and traceable fixed expenses of $32,000. During the same month, the West business segment had sales revenues of $920,000, variable expenses of $484,000, and traceable fixed expenses of $175,000. The common fixed expenses totaled $258,000 and were allocated as follows: $129,000 to the East business segment and $129,000 to the West business segment.
A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is:
$140,000 | ||
$(19,000) | ||
$(45,000) | ||
$78,000 |
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