Homework Answers
Solution 1:
Operations is not one of the levels of segmented income statements.
Hence first option is correct.
Solution 2:
Contribution margin ratio = Contribution margin / Sales = ($166,000,000 - $52,000,000) / $166,000,000 = 68.7%
Hence first option is correct.
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QUESTION 3 Which of the following is not one of the levels of segmented income statements?...
Exercise 6-7 Segmented Income Statement (LO6-4] Shannon Company segments its income statement into its North and...
Exercise 6-7 Segmented Income Statement (LO6-4] 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 $480,000, 36%, and $9,600, respectively. The North Division's contribution margin and contribution margin ratio are $92,000 and 40%, respectively. The South Division's segment margin is $32,500. The company has $62,400 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that...
EXERCISE 6-7 Segmented Income Statement [LO6-4 Shannon Company segments its income statement into its North and...
EXERCISE 6-7 Segmented Income Statement [LO6-4 Shannon Company segments its income statement into its North and South Divisions. The pany's overall sales, contribution margin ratio, and net operating income are $500,000 46%, and S10,000, respectively. The North Division's contribution margin and contribution margin ratio $150,000 and 50%, respectively. The South Division's segment margin is $30,000. The company has $90,000 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that uses...
The following monthly segmented income statement is for Condiment Company, which has three separate product lines...
The following monthly segmented income statement is for Condiment Company, which has three separate product lines (A, B, and C). A B C Total Sales revenue $37,500 $50,000 $12,500 $100,000 Variable costs $16,000 $27,500 $5,000 $48,500 Contribution margin $21,500 $22,500 $7,500 $51,500 Direct fixed costs $19,500 $16,000 $3,500 $39,000 Allocated fixed costs $3,750 $5,000 $1,250 $10,000 Profit (loss) $(1,750) $1,500 $2,750 $2,500 Management is concerned about the losses associated with product line A and is considering dropping this product line....
Segmented Income Statements, Adding and Dropping Product Lines Dantrell Palmer has Just been appointed manager of...
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Income Statements Segmented by Territory Script, Inc., has two product lines. The September income statements of...
Income Statements Segmented by Territory Script, Inc., has two product lines. The September income statements of each product line and the company are as follows: SCRIPT, INC. Product Line and Company Income Statements For Month of September Pens Pencils Total Sales $25,000 $30,000 $55,000 Less variable expenses (10,000) (12,000) (22,000) Contribution margin 15,000 18,000 33,000 Less direct fixed expenses (8,000) (6,000) (14,000) Product margin $7,000 $12,000 $19,000 Less common fixed expenses (6,000) Net income $13,000 Pens and pencils are sold...
Income Statements Segmented by Products Clay Consulting Firm provides three types of client services in three health-ca...
Income Statements Segmented by Products Clay Consulting Firm provides three types of client services in three health-care-related industries. The income statement for July is as follows: Clay Consulting Firm Income Statement For Month of July Sales Less variable costs Contribution margin $900,000 (604,000) 296,000 Less fixed expenses Service Selling and administrative Net income $70,000 65,000 (135,000) $161,000 The sales, contribution margin ratios, and direct fixed expenses for the three types of services are as follows: Sales Contribution margin ratio Direct...
Income Statements Segmented by Products Clay Consulting firm provides three types of client services in three heal...
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FunTime Company produces three lines of greeting cards: scented, musical, and regular. Segmented income statements for...
FunTime Company produces three lines of greeting cards: scented,
musical, and regular. Segmented income statements for the past year
are as follows:
Scented
Musical
Regular
Total
Sales
$ 10,000
$15,000
$25,000
$50,000
Less: Variable expenses
7,000
12,000
12,500
31,500
Contribution margin
$ 3,000
$ 3,000
$12,500
$18,500
Less: Direct fixed expenses
4,000
5,000
3,000
12,000
Segment margin
$ (1,000)
$ (2,000)
$ 9,500
$ 6,500
Less: Common fixed expenses
7,500
Operating income (loss)
$(1,000)
Kathy Bunker, president of FunTime, is...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio,...
Which of the following statements about cost-volume-profit analysis is true? To increase the contribution margin ratio, a manager should decrease fixed cost. The contribution margin ratio represents the percentage of sales revenue available to contribute towards covering variable and fixed costs. At the breakeven point, total sales revenue equals total costs. If a company expands operations outside of its relevant range, variable cost per unit could change, but total fixed costs will always stay constant.
Which of the following would appear on a segmented contribution margin income statement? Select one: A....
Which of the following would appear on a segmented contribution margin income statement? Select one: A. Cost of Goods Sold B. Variable Overhead C. Directly traceable fixed costs D. Sales E. All of the above
Exercise 6-7 Segmented Income Statement (LO6-4] 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 $480,000, 36%, and $9,600, respectively. The North Division's contribution margin and contribution margin ratio are $92,000 and 40%, respectively. The South Division's segment margin is $32,500. The company has $62,400 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that...
EXERCISE 6-7 Segmented Income Statement [LO6-4 Shannon Company segments its income statement into its North and South Divisions. The pany's overall sales, contribution margin ratio, and net operating income are $500,000 46%, and S10,000, respectively. The North Division's contribution margin and contribution margin ratio $150,000 and 50%, respectively. The South Division's segment margin is $30,000. The company has $90,000 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that uses...
Segmented Income Statements, Adding and Dropping Product Lines Dantrell Palmer has Just been appointed manager of Kirchner Glass Products Division. He has two years to make the division profitable. If the division is still showing a loss after two years, it will be eliminated, and Dantrell will be reassigned as arn assistant divisional manager in another division. The divisional income statement for the most recent year is as follows: Sales Less: Variable expenses $4,590,000 ,953,450 $535,550 575,000 38,450) 200,000 238,450)...
Income Statements Segmented by Territory Script, Inc., has two product lines. The September income statements of each product line and the company are as follows: SCRIPT, INC. Product Line and Company Income Statements For Month of September Pens Pencils Total Sales $25,000 $30,000 $55,000 Less variable expenses (10,000) (12,000) (22,000) Contribution margin 15,000 18,000 33,000 Less direct fixed expenses (8,000) (6,000) (14,000) Product margin $7,000 $12,000 $19,000 Less common fixed expenses (6,000) Net income $13,000 Pens and pencils are sold...
Income Statements Segmented by Products Clay Consulting Firm provides three types of client services in three health-care-related industries. The income statement for July is as follows: Clay Consulting Firm Income Statement For Month of July Sales Less variable costs Contribution margin $900,000 (604,000) 296,000 Less fixed expenses Service Selling and administrative Net income $70,000 65,000 (135,000) $161,000 The sales, contribution margin ratios, and direct fixed expenses for the three types of services are as follows: Sales Contribution margin ratio Direct...
Income Statements Segmented by Products Clay Consulting firm provides three types of client services in three health-care-related industries. The income statement for July is as follows: Clay Consulting Firm Income Statement For Month of July Sales $900,000 Less variable costs (604,000) Contribution margin 296,000 Less fixed expenses Service $70,000 Selling and administrative 65,000 (135,000) Net income $161,000 The sales, contribution margin ratios, and direct fixed expenses for the three types of services are as follows: Hospitals Physicians Nursing Care Sales...
FunTime Company produces three lines of greeting cards: scented,
musical, and regular. Segmented income statements for the past year
are as follows:
Scented
Musical
Regular
Total
Sales
$ 10,000
$15,000
$25,000
$50,000
Less: Variable expenses
7,000
12,000
12,500
31,500
Contribution margin
$ 3,000
$ 3,000
$12,500
$18,500
Less: Direct fixed expenses
4,000
5,000
3,000
12,000
Segment margin
$ (1,000)
$ (2,000)
$ 9,500
$ 6,500
Less: Common fixed expenses
7,500
Operating income (loss)
$(1,000)
Kathy Bunker, president of FunTime, is...
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