Question

Exercise 7-4 Basic Segmented Income Statement (L07-4) Royal Lawncare Company produces and sells two packaged products--Weedban and Greengrow. Revenue and cost information relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Product Weedban Greengrow $ 10.00 $ 32.00 $ 3.10 $ 13.00 $ 133,000 $ 49,000 Common fixed expenses in the company total $106,000 annually. Last year the company produced and sold 35,500 units of Weedban and 24,500 units of Greengrow. Required: Prepare a contribution format Income statement segmented by product lines. Total Company Product Line Weedban Greengrow Sales Variable expenses Contribution margin Traceable foxed expenses Product line segment margin Common fixed expenses not traceable to products Net operating income $ 0 $

Answer 1

	Total company	Weedban	Greengrow
Sales	$1,139,000	$355,000	$784,000
Variable expenses	$428,550	$110,050	$318,500
Contribution margin	$710,450	$244,950	$465,500
Traceable fixed expenses	$182,000	$133,000	$49,000
Product line segment margin	$528,450	$111,950	$416,500
Common fixed expenses not traceable to product	$106,000
Net operating income	$422,450