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Ferrar Corporation has two major business segments-Consumer and Commercial. Data for the segment and for the company for March appear below: In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment. Select one: a. test b. test c. test d. test

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Complete Question:

Ferrar Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for March appear below: Sales revenues, Consumer $ 680,000 Sales revenues, Commercial $ 280,000 Variable expenses, Consumer $ 394,000 Variable expenses, Commercial $ 143,000 Traceable fixed expenses, Consumer $ 102,000 Traceable fixed expenses, Commercial $ 45,000 In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial 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:

Answer:

Ferrar Corporation

A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

= $66,000.

Step-by-step explanation:

a) Data and Calculations:

Sales revenues, Consumer $ 680,000

Sales revenues, Commercial $ 280,000

Variable expenses, Consumer $ 394,000

Variable expenses, Commercial $ 143,000

Traceable fixed expenses, Consumer $ 102,000

Traceable fixed expenses, Commercial $ 45,000

In addition, common fixed expenses totaled $210,000 and were allocated as follows: $122,000 to the Consumer business segment and $88,000 to the Commercial business segment.

Segmented Income Statement for the month ended March 31

Consumer Commercial Total

Sales revenue $ 680,000 $ 280,000 $ 960,000

Variable expenses 394,000 143,000 537,000

Contribution margin $286,000 $137,000 $423,000

Traceable fixed expenses 102,000 45,000 147,000

Common fixed expenses 122,000 88,000 210,000

Total fixed expenses $224,000 $133,000 $357,000

Net income (loss) $62,000 $4,000 $66,000

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