Question

Question 58-60 The business staff of the pay Firm Flirt, Kit & SeanD has constructed the following report that breaks down the firm's overall results for last month into three business segments—foundation, salon and Kikay kits:

..... Company Total.......................................Foundation..........................Salon..........................Kikay kits     

Revenues from clients........................................2,000,000.............................................400,000...............................600,000.................1,000,000  

Variable expenses...................................................500,000................................................100,000.................................150,000....................250,000  

Traceable fixed expenses...................................800,000.................................................150,000.................................150,000....................500,000   

Common fixed expenses.....................................400,000...................................................25,000..................................45,000......................330,000

What is the Segment Margin of Kikay Kits?

A. 750,000

B. (80,000)

C. 250,000

D. None of the choices

What is the total fixed costs of pay Firm Flirt

A. 1,200,000

B. 800,000

C. 400,000

D. NONE OF THE CHOICES

Determine the Net Operating Income of Foundation.

A. 300,000

B. 150,000

C. 125,000

D. NONE OF THE CHOICES    

Answer 1

Salon Total 6,00,000 Segmented income statement :- Particulars Revenue from clients Less: Variable Expenses Contribution margin/(loss) Less: Traceable fixed expense :- Product line segment margin (loss) Less: Common fixed expenses Net operating income/(loss) Foundation 4,00,000 (1,00,000) 3,00,000 (1,50,000) 1,50,000 (1,50,000) 4,50,000 (1,50,000) 3,00,000 Kikay kits 10,00,000 (2,50,000) 7,50,000 (5,00,000) 2,50,000 20,00,000 (5,00,000) 15,00,000 (8,00,000) 7,00,000 (4,00,000) 3,00,000 Segment Margin of Kikay Kits is $ 250,000/. Option ) Total fixed costs of pay Firm Flirt is =(Traceable and common fixed cost) = (800000+400000) = $ 1,200,000/- Option A) Net Operating Income of Foundation is $ 150,000/. Option B)