Tennison Corporation Has Two Major Business Segments-Consumer and Commercial

question 119

Multiple Choice

Tennison Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for May appear below: In addition, common fixed expenses totaled $371,000 and were allocated as follows: $186,000 to the Consumer business segment and $185,000 to the Commercial business segment.
-A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:

• A)$272,000
• B)$270,000
• C)$86,000
• D)$514,000

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales over the short term, such as rent or salaries.

Model

A simplified representation, often mathematical, of a system or process used to analyze behavior, make predictions, or inform decision-making.

Waste Elimination

The process of identifying and removing unnecessary elements from processes or products to improve efficiency and reduce costs.

Variable Cost

Expenses that change in proportion to the activity of a business, such as costs for raw materials or production inputs.