Main Manufacturing Corporation reported consolidated revenues of $50,000,000 on its income statement for 2008.The management of the corporation identified 3 industry segments,M,N,and O.These segments had the following intersegment sales and transfers during 2008: For Main Manufacturing Corporation,the revenue test would be satisfied if any of its industry segments had revenue equal to or greater than which of the following?
A)$7,400,000
B)$5,740,000
C)$5,000,000
D)$4,260,000

Question

Quizplus · Accepted Answer

To satisfy the revenue test, at least one industry segment of Main Manufacturing Corporation must have reported revenue equal to or greater than 10% of the combined revenue of all of the industry segments. 
The combined revenue of segments M, N, and O is $57,400,000 ($50,000,000 + $4,000,000 + $3,400,000). 
10% of $57,400,000 is $5,740,000. Thus, segment M's revenue meets the revenue test as it reported revenues of $6,000,000. Therefore, the best choice is B.

Main Manufacturing Corporation Reported Consolidated Revenues of $50,000,000 on Its