Question

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 Greengrov $ 12.00 $ 37.00 $ 2.80 $ 10.00 $ 137,000 $ 39,000 Common fixed expenses in the company total $97,000 annually. Last year the company produced and sold 42.000 units of Weedban and 18,000 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines. Product Line Weedban Total Company Greengrow 0 0 Variable expenses Contribution margin Traceable foxed expenses Product line segment margin Common fixed expenses not traceable to products Net operating income 0 0 $ 0

Answer 1

Contribution Format Income statement
		total company		Weedban		greengrow
sales	504000+666000	1170000	42000*12	504000	18000*37	666000
variable expense	117600+180000	297600	42000*2.8	117600	18000*10	180000
contribution margin	386400+486000	872400		386400		486000
traceable fixed cost	137000+39000	176000		137000		39000
product line segement margin		696400		249400		447000
common fixed expenses not traceable to products		97000
net operating income		599400