Brown Corporation has two major business segments—Eastern and Western. In Novemb

Question

Brown Corporation has two major business segments—Eastern and Western. In November, the Eastern business segment had sales revenues of $450,000 and variable expenses of $220,000. During the same month, the Western business segment had sales revenues of $330,000 and variable expenses of $195,000. Traceable fixed expenses totaled $216,000 and were allocated as 70% to Eastern and 30% to Western. Common fixed expenses totaled $193,000.

            Required:   Prepare a segmented income statement in the contribution format for the company.

Explanation / Answer

Total Eastern Western Sales revenue 780000 450000 330000 Variable expenses 415000 220000 195000 Contribution margin 365000 230000 135000 Traceable fixed expenses 216000 151200 64800 Segemnt margin 149000 78800 70200 Common fixed expenses 193000 Net operating income(loss) -44000

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