Question

EXERCISE 4-4 Basic Segmented Income Statement QL04-4 Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Selling price per unit Variable expenses per unit Traceable fixed expenses per year Weedban $6.00 $2.40 $45,000 Greengrow $7.50 $5.25 $21,000 Page 204 Common fixed expenses in the company total $33,000 annually. Last year the company produced and sold 15,000 units of Weedban and 28,000 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines.

Answer 1

	Total	Weedban	greengrow
Sales	300000	90000	210000
Variable expenses	183000	36000	147000
Contribution margin	117000	54000	63000
traceable fixed expenses	66000	45000	21000
Product line segment margin	51000
Common fixed expenses not traceable to products	33000
net operating income	18000

Working

Sales
Weedban	15000*6	90000
Greegrow	28000*7.5	210000
Variable expenses
Weedban	15000*2.4	36000
Greegrow	28000*5.25	147000