Question

ABC Company operates two divisions with the following sales and expense information for the month of August:

Division 1: sales, $150,000; contribution margin ratio, 50%; direct fixed expenses, $31,500.
Division 2: sales, $102,500; contribution margin ratio, 70%; direct fixed expenses, $19,750.

ABC Company’s total fixed expenses during August was $127,000.

Required:
Prepare a segmented income statement for ABC Company to determine the segment margin for Divisions 1 and 2 and the operating income for ABC Company.

	total company	division 1	division 2
sales	252,500	150,000	102,500
variable expense	?	?	?
Contribution margin	146,750	75,000	71,750
direct fixed expenses	51,250	31,500	19,750
segment margin	?	43,500	?
Common fixed expenses	?
Operating income	?

Everything filled in is correct, the Common fixed expenses and operating income is not needed for division 1 and 2

Answer 1

	total company	division 1	division 2
sales	252,500	150,000	102,500
variable expense	105,750	75,000	30,750
Contribution margin	146,750	75,000	71,750
direct fixed expenses	51,250	31,500	19,750
segment margin	95,500	43,500	52,000
Common fixed expenses	75,750
Operating income	19,750

A. В 1 2 sales 3 variable expense 4. Contribution margin 5 direct fixed expenses 6 segment margin Common fixed expenses 8 Operating income total company division 1 division 2 252500 150000 1102500 =SUM(C3:D3) =C2-C4 =D2-D4 =SUM(C4:04) =C2*50% =D2*70% =C5+D5 31500 19750 =B4-B5 =C4-C5 =D4-D5 =127000-B5 =B6-B7 7 Cor