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Nutka1998 [239]
3 years ago
8

Cervetti Corporation has two major business segments, East and West. In July, the East business segment had sales revenues of $2

20,000, variable expenses of $125,000, and traceable fixed expenses of $29,000. During the same month, the West business segment had sales revenues of $890,000, variable expenses of $472,000, and traceable fixed expenses of $169,000. The common fixed expenses totaled $246,000 and were allocated as follows: $123,000 to the East business segment and $123,000 to the West business segment.
The contribution margin of the West business segment is:

a. $418,000
b. $66,000
c. -$57,000
d. $513,000
Business
1 answer:
Akimi4 [234]3 years ago
7 0

Answer:

a. $418,000

Explanation:

The computation of the contribution margin of the West business segment is shown below:

Contribution margin = Sales revenue - variable expenses

= $890,000 - $472,000

= $418,000

By deducting the variable expenses from the sales revenue we can get the contribution margin and we applied the same that is shown above.

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