Solve: Segment Margin
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Ferrar Corporation has two major business segments - Consumer and Commercial. Data for the segment and for the company for March appear below:
Sales revenues, Consumer $681,000
Sales revenues, Commercial $300,000
Variable expenses, Consumer $384,000
Variable expenses, Commercial $133,000
Traceable fixed expenses, Consumer $100,000
Traceable fixed expenses, Commercial $35,000
In addition, common fixed expenses totaled $179,000 and were allocated as follows: $104,000 to the Consumer business segment and $75,000 to the Commercial business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the Consumer business segment is:
$200,000
$202,000
$191,000
$197,000
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This posting helps solve a segment margin. In a very brief, but concise response, this solution provides the simple equation which is required to calculate the segment margin.
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