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 expenses per year Product S 11.00 S 39.00 S 130,000 36,000 2.50 12.00 Common fixed expenses in the company total S104,000 annually. Last year the company produced and sold 39,000 units of Weedban and 15,500 units of Greengrow. Required Prepare a contribution format income statement segmented by product lines. Product Line Total Weedban Greengrow

Answer 1

	Total Company	Weedban	Greengrow
Sales	$1,033,500	$429,000	$604,500
Variable expenses	$283,500	$97,500	$186,000
Contribution margin	$750,000	$331,500	$418,500
Traceable fixed expenses	$166,000	$130,000	$36,000
Product line segment margin	$584,000	$201,500	$382,500
Common fixed expenses not traceable to products	$104,000
Net operating income	$480,000