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

question 233

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 net operating income of the company as a whole is:

• A) $294,000
• B) $422,000
• C) $132,000
• D) $(30,000)

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Definitions:

Current Yield

Current Yield is the annual income (interest or dividends) earned from an investment, expressed as a percentage of the current price of the security.

Trading

The action or activity of buying, selling, or exchanging goods, services, or financial instruments.

Coupon Bond

A type of debt security that pays the holder periodic interest payments based on the coupon rate until maturity, at which point the principal is repaid.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, accounting for interest payments and repayment of principal.