Question

Data for January for Bondi Corporation and its two major business segments, North and South, appear below:Sales revenues, North $ 759,000Variable expenses, North $ 440,500Traceable fixed expenses, North $ 90,900Sales revenues, South $ 586,800Variable expenses, South $ 334,900Traceable fixed expenses, South $ 76,000In addition, common fixed expenses totaled $206,000 and were allocated as follows: $107,000 to the North business segment and $99,000 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:

Answer 1

Answer and Explanation:

The computation of the segment margin of the North business segment is shown below:

Particulars Total North South

Sales $1,345,800 $759,000 $586,800

Less:

Variable cost -$775,400 $440,500 $334,900

Contribution margin $570,400 $318,500 $251,900

Less:

Fixed cost $166,900 $90,900 $76,000

Segment margin $403500 $227600 $175900

Less: common fixed ex $206,000

Net operating income $197,500