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 expenas per year Product Veedban Green $ 9.00 $31.00 2.90 $12.00 $ 132,000 $ 33,000 Common fixed expenses in the company total $114,000 annually. Last year the company produced and sold 39,500 units of Weedban and 22,000 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines. Total Company Product Line Weedban Greengrow

Answer 1

Contribution format income statement

	Company	Weedban	Greengrow
Sales	1,037,500	39,500 x 9 = 355,500	22,000 x 31 = 682,000
Variable expenses	- 378,000	39,500 x 2.90 = -114,000	22,000 x 12 = - -264,000
Contribution margin	659,500	241,500	418,000
Traceable fixed expenses	- 165,000	- 132,000	- 33,000
Segment margin	494,500	109,500	385,000
Common fixed expenses	- 114,000
Net operating income	380,500