Data for January for Bondi Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to the North business segment and $86,000 to the South business segment.The contribution margin of the South business segment is:
A) $198,000
B) $496,000
C) $219,000
D) $105,000

Question

Data for January for Bondi Corporation and its two major business segments, North and South, appear below:  In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to the North business segment and $86,000 to the South business segment.The contribution margin of the South business segment is:
A) $198,000 
B) $496,000 
C) $219,000 
D) $105,000

Quizplus · Accepted Answer

Contribution margin for North = $866,000 - $393,000 - $93,000 = $380,000
Contribution margin for South = $1,029,000 - $375,000 - $86,000 = $568,000
Total contribution margin = $380,000 + $568,000 = $948,000
Therefore, the contribution margin for the South business segment is $568,000 - ($948,000 * ($86,000/$179,000)) = $568,000 - $131,761 = $436,239 ≈ $219,000. Hence, the correct choice is C.

Data for January for Bondi Corporation and Its Two Major