Homework Answers
Answer
- FALSE
- Common Fixed Costs are ‘common’ to all the departments/products, and it should not be allocated to the product or department segments.
- The basis determined for allocating such common fixed expenses may vary and can lead to deceiving results.
- That’s why, common fixed expenses are shown separately without allocating them to various segments, on a segmented income statement.
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Allocating common fixed costs to segments on segmented income statements increases the usefulness of such stat...
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...
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...
Niangua Co. is divided into three segments and is interested in preparing a segmented income statement...
Niangua Co. is divided into three segments and is interested in preparing a segmented income statement in order to better understand the operating performance of each segment. Fixed expenses in each division currently include an allocation of general corporate expenses equal to 20% of the division's sales. Division 1 Division 2 Division 3 Sales $ 320,000 $ 200,000 $ 280,000 Variable expenses 208,000 120,000 152,000 Contribution margin $ 112,000 $ 80,000 $ 128,000 Fixed expenses 80,000 88,000 72,000 Net income...
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...
sales revenue 780,000 variable costs 507,000 fixed costs 218,000 which of the following statements is true...
sales revenue 780,000 variable costs 507,000 fixed costs 218,000 which of the following statements is true of the false volume increases by 14%. A. Operating income will increase by $38,220 B. Operating income will increase by $ 70,980 C. Fixed assets will increase by $30,520
1.What is a segment? Thinking of your current or past employer, how is/was the business segmented?...
1.What is a segment? Thinking of your current or past employer, how is/was the business segmented? What is meant by decentralization? What are the advantages and disadvantages? 2. what is the danger in allocating common fixed costs among product lines or other segments of an organization? Give examples. 3.
Discussion Chapter 10 Please read the rubric first! What is a relevant cost, please explain and provide an example? What is the danger in allocating common fixed costs among products or others segmen...
Discussion Chapter 10 Please read the rubric first! What is a relevant cost, please explain and provide an example? What is the danger in allocating common fixed costs among products or others segments of an organization?
Segmented Income Statements, Inventory Valuation For the coming year, Archway Computers Inc. expects to produce and...
Segmented Income Statements, Inventory Valuation For the coming year, Archway Computers Inc. expects to produce and sell 144,000 computers. Of these, 64,000 will be consumer (personal computers and 80,000 will be small business computers. Common fixed overhead is $1,700,000. Additional information for the coming year is as follows: 90 Consumer Computer Small Business Computer Price $640 $1,675 Unit direct materials 442 988 Unit direct labour 310 Unit variable overhead Unit variable selling expense Total direct fixed overhead 120,000 350,000 Fixed...
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...
urgentt help me Hwk - Segments Saved 2 Exercise 6-7 Segmented Income Statement [LO6-4) 1.16 points...
urgentt help me
Hwk - Segments Saved 2 Exercise 6-7 Segmented Income Statement [LO6-4) 1.16 points 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 $640,000, 60%, and $64,000, respectively. The North Division's contribution margin and contribution margin ratio are $195,000 and 75%, respectively. The South Division's segment margin is $54,000. The company has $76,800 of common fixed expenses that cannot be traced to either...
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...
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...
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...
Segmented Income Statements, Inventory Valuation For the coming year, Archway Computers Inc. expects to produce and sell 144,000 computers. Of these, 64,000 will be consumer (personal computers and 80,000 will be small business computers. Common fixed overhead is $1,700,000. Additional information for the coming year is as follows: 90 Consumer Computer Small Business Computer Price $640 $1,675 Unit direct materials 442 988 Unit direct labour 310 Unit variable overhead Unit variable selling expense Total direct fixed overhead 120,000 350,000 Fixed...
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...
urgentt help me
Hwk - Segments Saved 2 Exercise 6-7 Segmented Income Statement [LO6-4) 1.16 points 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 $640,000, 60%, and $64,000, respectively. The North Division's contribution margin and contribution margin ratio are $195,000 and 75%, respectively. The South Division's segment margin is $54,000. The company has $76,800 of common fixed expenses that cannot be traced to either...
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