Kulp Corporation Has Two Major Business Segments-East and West

question 39

Multiple Choice

Kulp Corporation has two major business segments-East and West. In July, the East business segment had sales revenues of $900,000, variable expenses of $441,000, and traceable fixed expenses of $171,000. During the same month, the West business segment had sales revenues of $450,000, variable expenses of $234,000, and traceable fixed expenses of $45,000. The common fixed expenses totaled $321,000 and were allocated as follows: $180,000 to the East business segment and $141,000 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) $288,000
• B) $279,000
• C) $108,000
• D) $441,000

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