Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $360,000, variable expenses of $195,000, and traceable fixed expenses of $43,000. During the same month, the West business segment had sales revenues of $1,030,000, variable expenses of $528,000, and traceable fixed expenses of $197,000. The common fixed expenses totaled $302,000 and were allocated as follows: $151,000 to the East business segment and $151,000 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:

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9 November, 18:24

Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $360,000, variable expenses of $195,000, and traceable fixed expenses of $43,000. During the same month, the West business segment had sales revenues of $1,030,000, variable expenses of $528,000, and traceable fixed expenses of $197,000. The common fixed expenses totaled $302,000 and were allocated as follows: $151,000 to the East business segment and $151,000 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:

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Ireland Lara · Answer 1

The preparation of the constructed segmented income statement is shown below

Explanation:

The contribution margin income statement for East business segment is presented below:

Sales $360,000

Less: Variable cost ($195,000)

Contribution margin $165,000

Less: Traceable fixed expenses ($43,000)

Segment margin $122,000