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

question 36

Multiple Choice

Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $690,000, variable expenses of $352,000, and traceable fixed expenses of $104,000. During the same month, the West business segment had sales revenues of $140,000, variable expenses of $56,000, and traceable fixed expenses of $24,000. The common fixed expenses totaled $162,000 and were allocated as follows: $89,000 to the East business segment and $73,000 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) $352,000
• B) $145,000
• C) $234,000
• D) $249,000

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Definitions:

Export Development Canada

A Canadian government agency that provides insurance and financial services, among others, to help Canadian exporters and investors expand their international business.

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Government bonds issued by the United Kingdom, considered low-risk investments since they are backed by the British government.