Forth Corporation Has Two Major Business Segments-Retail and Wholesale

question 59

Essay

Forth Corporation has two major business segments-Retail and Wholesale. In March, the Retail business segment had sales revenues of $500,000, variable expenses of $245,000, and traceable fixed expenses of $90,000. During the same month, the Wholesale business segment had sales revenues of $240,000, variable expenses of $101,000, and traceable fixed expenses of $38,000. Common fixed expenses totaled $152,000 and were allocated as follows: $79,000 to the Retail business segment and $73,000 to the Wholesale business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.

---

Definitions:

Real Exchange Rate

The rate at which two currencies can be exchanged, adjusted for inflation, indicating how much of a country's goods and services can be exchanged for those of another country.

Prices Rise

An increase in the cost of goods and services in an economy over a period of time.

Purchasing-Power Parity

A theory that states prices of goods and services should equalize across countries when expressed in a common currency, accounting for exchange rates.

Money Supply

The grand total of money available in an economy at a specific time, encompassing cash, coins, and deposits in checking and savings accounts.