Niesen Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for August appear below: In addition, common fixed expenses totaled $282,000 and were allocated as follows: $127,000 to the Consumer business segment and $155,000 to the Commercial business segment.
-A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:
A) $110,000
B) $392,000
C) $546,000
D) -$172,000

Question

Niesen Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for August appear below:  In addition, common fixed expenses totaled $282,000 and were allocated as follows: $127,000 to the Consumer business segment and $155,000 to the Commercial business segment.
-A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:
A) $110,000 
B) $392,000 
C) $546,000 
D) -$172,000

Quizplus · Accepted Answer

The net operating income of the company as a whole is $110,000. This is calculated by subtracting the total variable costs ($392,000) from the total revenue ($502,000).

Niesen Corporation Has Two Major Business Segments-Consumer and Commercial