Stryker Corporation Has Two Major Business Segments-East and West

question 155

Multiple Choice

Stryker Corporation has two major business segments-East and West. In April, the East business segment had sales revenues of $500,000, variable expenses of $280,000, and traceable fixed expenses of $80,000. During the same month, the West business segment had sales revenues of $970,000, variable expenses of $514,000, and traceable fixed expenses of $184,000. The common fixed expenses totaled $280,000 and were allocated as follows: $112,000 to the East business segment and $168,000 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)$412,000
• B)$676,000
• C)-$148,000
• D)$132,000

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Definitions:

Factory

A building or group of buildings where goods are manufactured or assembled chiefly by machine.

Selling Price

The amount of money that a seller asks for in exchange for a product or service.

Mark-up

The amount added to the cost price of goods to cover overhead and profit, resulting in the selling price.

Sweater

A knitted garment typically with long sleeves, worn over the upper body.