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