Tubaugh Corporation Has Two Major Business Segments--East and West

question 364

Multiple Choice

Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $380,000, variable expenses of $205,000, and traceable fixed expenses of $45,000. During the same month, the West business segment had sales revenues of $1,050,000, variable expenses of $536,000, and traceable fixed expenses of $201,000. The common fixed expenses totaled $310,000 and were allocated as follows: $155,000 to the East business segment and $155,000 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:

• A) $205,000
• B) $130,000
• C) $(20,000)
• D) $(23,000)

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Definitions:

Productivity

The effectiveness in producing outcomes or results; can refer to the rate at which work is completed or the efficiency of resource use.

Output

The total amount of goods or services produced by a firm, industry, or economy within a specific period.

MRP Schedule

A document or plan that outlines the marginal revenue product of an input, showing how changes in quantity of the input affect revenue generated.

Perfect Competitor

An individual or company that cannot influence the market price because the market is saturated with similar products, acting within a perfectly competitive market.