Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $690,000, variable expenses of $352,000, and traceable fixed expenses of $104,000. During the same month, the West business segment had sales revenues of $140,000, variable expenses of $56,000, and traceable fixed expenses of $24,000. The common fixed expenses totaled $162,000 and were allocated as follows: $89,000 to the East business segment and $73,000 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:
A) $352,000
B) $145,000
C) $234,000
D) $249,000

Question

Quizplus · Accepted Answer

The segment margin is calculated as sales revenues minus variable expenses and traceable fixed expenses. For the East business segment, this is $690,000 - $352,000 - $104,000 = $234,000.

Tubaugh Corporation Has Two Major Business Segments--East and West