Question
In: Accounting
Walsh Corporation has two major business segments: Consumer and Commercial.
Walsh Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below:
| Sales revenues, Consumer | $ | 680,000 | |
| Sales revenues, Commercial | $ | 280,000 | |
| Variable expenses, Consumer | $ | 394,000 | |
| Variable expenses, Commercial | $ | 143,000 | |
| Traceable fixed expenses, Consumer | $ | 102,000 | |
| Traceable fixed expenses, Commercial | $ | 45,000 | |
In addition, common fixed expenses totaled $210,000 and were
allocated as follows: $122,000 to the Consumer business segment and
$88,000 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:
Select one:
a. $164,000
b. $184,000
c. $62,000
d. $394,000
Solutions
Expert Solution
| Segment margin | ||||||
| Consumer business | ||||||
| sales | 680,000 | |||||
| less variable expense | 394,000 | |||||
| contribution margin | 286,000 | |||||
| less traceable expense | 102,000 | |||||
| segment margin | 184,000 | |||||
| answer) | ||||||
| option b | ||||||
| 184,000 | ||||||
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accounting intern was asked to prepare segmented income statements
that the company’s divisional managers could use to calculate their
break-even points and make decisions. She took the prior month’s
companywide income statement and prepared the absorption format
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