Segment margin of the consumer business segment


Problem:

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

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Accounting Basics: Segment margin of the consumer business segment
Reference No:- TGS01931531

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