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 $1,020,000, 38%, and $20,400, respectively. The North Division's contribution margin and contribution margin ratio are $142,800 and 42%, respectively. The South Division's segment margin is $163,200. The company has $244,800 of common fixed expenses that cannot be traced to either division. 3.07 points 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).) eBook Hint Total Company Amount % $ 1,020,000 North Amount Divisions South Amount 100.01 % % 100.0 Print References Sales Variable expenses Contribution margin Traceable fixed expenses Territorial segment margin Common fixed expenses Net operating income

Answer 1

Statement showing Computations	Total company		North		South
Particulars	Amount	%	Amount	%	Amount	%
Sales North =142,800/42% South =1020,000 - 340,000	1,020,000.00	100.00%	340,000.00	100.00%	680,000.00	100.00%
Less Variable Expenses Total =1020,000-387,600 North = 340,000 - 142800 South =680,000 - 244800	632,400.00	62.00%	197,200.00	58.00%	435,200.00	64.00%
Contribution Margin Total =1020,000*38% South = 81600 + 163200	387,600.00	38.00%	142,800.00	42.00%	244,800.00	36.00%
Traceable Fixed expenses Total = 387,600-265,200 North =142,800-102,000 South =122400 - 40800	122,400.00	12.00%	40,800.00	12.00%	81,600.00	12.00%
Territorial Segment Margin Total = 244,800+20,400 North = 265,200 - 163,200	265,200.00	26.00%	102,000.00	30.00%	163,200.00	24.00%
Common fixed expenses	244,800.00
Net operating Income	20,400.00