Asked by James Stupin on Jul 22, 2024
Verified
A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:
A) $294,000
B) $422,000
C) $132,000
D) ($30,000)
Net Operating Income
The profit generated from a company's everyday operations, excluding income and expenses not related to its core activities.
Contribution Format
A statement or report format, primarily used in managerial accounting, that separates fixed and variable costs to evaluate the performance of a profit center.
- Enhance the proficiency in crafting and understanding segmented income statements in a contribution format.
Verified Answer
JA
Jeffrey AtkinsonJul 26, 2024
Final Answer :
C
Explanation :
Reference: CHO7-Ref42
Ieso Corporation has two stores: J and K.During November, Ieso Corporation reported a net operating income of $30,000 and sales of $450,000.The contribution margin in Store J was $100,000, or 40% of sales.The segment margin in Store K was $30,000, or 15% of sales.Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.
Ieso Corporation has two stores: J and K.During November, Ieso Corporation reported a net operating income of $30,000 and sales of $450,000.The contribution margin in Store J was $100,000, or 40% of sales.The segment margin in Store K was $30,000, or 15% of sales.Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K.
Learning Objectives
- Enhance the proficiency in crafting and understanding segmented income statements in a contribution format.
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