Segmented income statement Clean-It Inc. manufactures two products, brooms and mops, wh...

Segmented income statement

Clean-It Inc. manufactures two products, brooms and mops, which are sold in two territories designated by the company as East Territory and West Territory. The following income statement prepared for the company shows the product-line segments.

Required:

1. Prepare a segmented income statement by territories. The direct fixed costs of the product lines should be treated as common fixed costs on the segmented statement being prepared.

2. What is the significance of this analysis?