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tubaugh corporation has two major business segments--East and West. In december, the east business segment has...

tubaugh corporation has two major business segments--East and West. In december, the east business segment has sales revenue of $280,000, variable expenses of $155,000 and traceable fixed expense of $35,000. During the same month, the west business segment has sales revenue of $950,000, variable expenses of $496,000 and traceable fixed expenses of $181,000. the common fixed expenses total $270,000 and were alloacated as follows: $135,000 to the east business segment and $135,000 to the west business segment. Aproperly constructed segmented income statement in a contribution format would show that the segment margin of the east business segment is:

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Answer #1

Ans) Constructed segmented income statement:

Particulars East $ West $ Total $
Sales 280,000 950,000 1,230,000
Variable costs (155,000) (496,000) (651,000)
Contribution margin 125,000 454,000 579,000
Traceable fixed costs (35,000) (181,000) (216,000)
Segment margin 90,000 273,000 363,000
Common fixed costs (135,000) (135,000) (270,000)
Net operating income (45,000) 138,000 93,000

Contribution margin and segment margin for the east business are $125,000 and $90,000 respectively.

If any doubts or queries please comment and clarify I'll explain asap.

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