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

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:

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.

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