Question

Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $420,000, variable expenses of $225,000, and traceable fixed expenses of $49,000. During the same month, the West business segment had sales revenues of $1,090,000, variable expenses of $552,000, and traceable fixed expenses of $209,000. The common fixed expenses totaled $326,000 and were allocated as follows: $163,000 to the East business segment and $163,000 to the West business segment.
The contribution margin of the West business segment is:______


a. $538,000

b. $753,000

c. $27,000

d. $146,000

Answer 1

Answer:

The correct answer is A.

Explanation:

Giving the following information:

The West business segment had sales revenues of $1,090,000, variable expenses of $552,000.

The contribution margin is calculated deducting form sales the total variable expenses:

Contribution margin= 1,090,000 - 552,000= $538,000