Question

Shannon Company segments its income statement into its North and South Divisions. The company's overall sales, contribution margin ratio, and net operating income are $790,000, 48%, and $15,800, respectively. The North Division's contribution margin and contribution margin ratio are $150,800 and 52%, respectively. The South Division's segment margin is $95,000. The company has $150,100 of common fixed expenses that cannot be traced to either division. Required Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales. (Round your percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3). Divisions Total Company North South Amount Amount Amount

Answer 1

Segmented income statement:

	Total Company		North		South
	Amount	%	Amount	%	Amount	%
Sales	790000	100%	290000	100%	500000	100%
Variable Cost	410800	52%	139200	48%	271600	54.3%
Contribution margin	379200	48%	150800	52%	228400	45.7%
Fixed cost	213300	27%	79900	27.6%	133400	26.7%
Segment margin	165900	21%	70900	24.4%	95000	19%
Common Expense	150100	19%
Net operating income	15800	2%