Data for September for Mossman Corporation and Its Two Major

question 1

Multiple Choice

Data for September for Mossman Corporation and its two major business segments, North and South, appear below: In addition, common fixed expenses totaled $319,000 and were allocated as follows: $160,000 to the North business segment and $159,000 to the South business segment.
-A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

• A) $211,000
• B) $51,000
• C) $259,000
• D) $121,000

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Definitions:

Synthetic Grease

A lubricant made from chemical compounds that does not contain petroleum, designed to reduce friction and wear on various types of machinery.

Financial Break-even

The point at which total revenue equals total costs and expenses, resulting in no net loss or gain.

Variable Costs

Expenses that vary directly with the volume of production or the degree of activity within a company.

Fixed Costs

Costs that do not vary with the volume of production or level of activity within a certain range. These are expenses that must be paid regardless of business activity, such as rent or salaries.