Question

Data for January for Bondi Corporation and its two major business segments, North and South, appear below:

Sales revenues, North $ 587,000
Variable expenses, North $ 340,600
Traceable fixed expenses, North $ 70,200
Sales revenues, South $ 453,200
Variable expenses, South $ 258,600
Traceable fixed expenses, South $ 58,600
In addition, common fixed expenses totaled $158,900 and were allocated as follows: $82,500 to the North business segment and $76,400 to the South business segment.

A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

a.$93,700

b.$340,600

c.$176,200

d.$163,900

Answer 1

Answer:

c.$176,200

Explanation:

The questionis to determine the segment margin of the North Business Segment

Pitfall to note: the question contains data for both the North and the South Segments, as such, only the data relevant to the North Segment should be used for the calculation as follows:

Sales Revenue =                  $587,000

Subtract: Variable Exp.        ($340,000)

COntribution margin          $264,400

Subtract: Traceable Fixed   ($70,200)

The Segment Margin          $176,200 Option c