Information pertaining to Luigi Co. is as follows:
Sales
Variable cost of goods sold Direct fixed overhead
Fleece Blanket
$425,000 124,000 29,000
Thermal Blanket
$524,000 213,000 36,000
A sales commission of 3% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $32,000 for the fleece blankets and $66,000 for the thermal blankets. Common fixed overhead for the factory was estimated to be $83,000 and common selling and administrative expense was estimated to be $14,000.
Required: Prepare a segmented income statement for Luigi Co. for the coming year, using variable costing.
Answer-
LUIGI CO. | |||
CONTRIBUTION FORMAT SEGMENTED INCOME STATEMENT | |||
USING VARIABLE COSTING | |||
PARTICULARS | FLEECE BLANKET | THERMAL BLANKET | TOTAL COMPANY |
$ | $ | $ | |
Sales(a) | 425000 | 524000 | 949000 |
Less - Variable expenses | |||
Cost of goods sold | 124000 | 213000 | 337000 |
Sales commissions @ 3% | 12750 | 15720 | 28470 |
Total variable expenses (b) | 136750 | 228720 | 365470 |
Contribution margin (c=a-b) | 288250 | 295280 | 583530 |
Traceable fixed expenses | |||
Direct overhead | 29000 | 36000 | 65000 |
Selling & administrative expenses | 32000 | 66000 | 98000 |
Total traceable fixed expenses (d) | 61000 | 102000 | 163000 |
Product line segment margin (e=c-d) | 227250 | 193280 | 420530 |
Less- Common fixed expenses | |||
Direct overhead | 83000 | ||
Selling & administrative expenses | 14000 | ||
Total common fixed expenses (f) | 97000 | ||
Net income (g= e-f) | 323530 |
Information pertaining to Luigi Co. is as follows: Sales Variable cost of goods sold Direct fixed...
Information pertaining to Luigi Co. is as follows: Sales Variable cost of goods sold Direct fixed overhead Fleece Blanket $425,000 124,000 29,000 Thermal Blanket $524,000 213,000 36,000 A sales commission of 3% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $32,000 for the fleece blankets and $66,000 for the thermal blankets. Common fixed overhead for the factory was estimated to be $83,000 and common selling and administrative...
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