Question

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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 expenses per year Product Weedban Greengrow $ 11.00 $ 31.00 $ 2.90 $ 11.00 $ 129,000 $ 32,000 Common fixed expenses in the company total $112,000 annually. Last year the company produced and sold 40,500 units of Weedban and 22,000 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines. Product Line Weedban Greengrow Company 0 0 0 $ 0 $ 0 $ 0

Answer 1

Sales Variable expense Contribution margin Traceable fixed expenses Product line segment margin Common fixed expenses not traceable to products Net operating income Product Line Total Company Weedban Greengrow $11,27,500 $4,45,500 $6,82,000 $3,59,450 $1,17,450 $2,42,000 $7,68,050 $3,28,050 $1,61,000 $1,29,000 $32,000 $6,07,050) $1,12,000 $4,95,050