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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