Question

Clemmens Corporation has two major business segments: Consumer and Commercial. Data for the segments and for the company for August appear below: Sales revenues, Consumer $390,000 Sales revenues, Commercial $530,000 Variable expenses, Consumer $179,000 Variable expenses, Commercial $265,000 Traceable fixed expenses, Consumer $59,000 Traceable fixed expenses, Commercial $64,000 In addition, common fixed expenses totaled $265,000 and were allocated as follows: $135,000 to the Consumer business segment and $130,000 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: Group of answer choices $88,000 $353,000 $476,000 -$177,000

Answer 1

Answer:

Net Operating income of the company is $88,000.

Explanation:

Segmented Income Statement      

  Consumer Commercial Total

Sales revenue   390000 530000 920000

Less: Variable cost   179000 265000 444000

Contribution margin   211000 265000 476000

Less: Traceable fixed cost   59000 64000 123000

Segment margin   152000 201000 353000

Less: Common Fixed cost     265000

Net Operating income     88000