Please help with the following problem. Provide a simple solution for each.
Ferrar Corporation has two major business segments - Consumer and Commercial. Data for the segment and for the company for March appear below:
Sales revenues, Consumer $681,000
Sales revenues, Commercial $300,000
Variable expenses, Consumer $384,000
Variable expenses, Commercial $133,000
Traceable fixed expenses, Consumer $100,000
Traceable fixed expenses, Commercial $35,000
In addition, common fixed expenses totaled $179,000 and were allocated as follows: $104,000 to the Consumer business segment and $75,000 to the Commercial business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:
- $200,000
- $202,000
- $191,000
- $197,000