Fausnaught Corporation has two major business segments--Retail and Wholesale. In October, the Retail business segment had sales revenues of $730,000, variable expenses of $409,000, and traceable fixed expenses of $117,000. During the same month, the Wholesale business segment had sales revenues of $400,000, variable expenses of $220,000, and traceable fixed expenses of $48,000. Common fixed expenses totaled $218,000 and were allocated as follows: $122,000 to the Retail business segment and $96,000 to the Wholesale business segment. Required:Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.
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| Total Company | Retail | Wholesale | ||||||
| Sales | $ | 1,130,000 | $ | 730,000 | $ | 400,000 | ||
| Variable expenses | 629,000 | 409,000 | 220,000 | |||||
| Contribution margin | 501,000 | 321,000 | 180,000 | |||||
| Traceable fixed expenses | 165,000 | 117,000 | 48,000 | |||||
| Segment margin | 336,000 | $ | 204,000 | $ | 132,000 | |||
| Common fixed expenses | 218,000 | |||||||
| Net operating income | $ | 118,000 | ||||||
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What will be an ideal response?
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