Cervetti Corporation Has Two Major Business Segments-East and West

question 26

Multiple Choice

Cervetti Corporation has two major business segments-East and West. In July, the East business segment had sales revenues of $220,000, variable expenses of $125,000, and traceable fixed expenses of $29,000. During the same month, the West business segment had sales revenues of $890,000, variable expenses of $472,000, and traceable fixed expenses of $169,000. The common fixed expenses totaled $246,000 and were allocated as follows: $123,000 to the East business segment and $123,000 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)$125,000
• B)$66,000
• C)-$28,000
• D)-$57,000

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Definitions:

Osteoblast

A type of cell that is responsible for bone formation, secreting the matrix for bone and playing a key role in bone growth and healing.

Endosteum

Membranous lining of the medullary cavity and the cavities of spongy bone.

Periosteum

Bones are encased in a thick connective tissue full of blood vessels, except where the joints are located.

Ruffled Borders

Ruffled borders are specialized structures of osteoclasts involved in bone resorption, where the bone surface is broken down and minerals released.