Question

Data for January for Corporation and its two major business segments, North and South, appear below:

Sales revenues, North	$660,000
Variable expenses, North	$383,000
Traceable fixed expenses, North	$79,000
Sales revenues, South	$510,000
Variable expenses, South	$291,000
Traceable fixed expenses, South	$66,000

In addition, common fixed expenses totaled $179,000. A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

Answer 1

	North	South	Total
Sales	$       660,000	$       510,000	$    1,170,000
Less Variable Expenses	$       383,000	$       291,000	$        674,000
Contribution Margin	$       277,000	$       219,000	$        496,000
Less Traceable Fixed Expenses	$         79,000	$          66,000	$        145,000
Segment Margin	$       198,000	$       153,000	$       351,000
Less Common Fixed Expenses			$        179,000
Net Operating Income			$       172,000