PROBLEM 13-26 Finely Segmented Income Statements [LO1]Companhia Bradesco, S.A., of Brazil, an industrial supply store chain, has two divisions. Thecompany's contribution format income statement segmented by divisions for last year is givenbelow (the currency in Brazil is the real, denoted here by R):TotalDivisionCompanyPlasticsGlassSales.Variable expensesR1,500,000700,000R900,000400,000R600,000300,000Contribution margin .800,000500,000300,000Traceable fixed expenses:Advertising.Depreciation300,000140,000220,000180,00092,000118,000120,00048,000102,000Administration.Total....660,000390,000270,000R 30,000Divisional segment margin.Common fixed expenses140,000100,000R110,000Net operating income..R40,000Top management doesn't understand why the Glass Division has such a low segment mar-gin when its sales are only one-third less than sales in the Plastics Division. Accordingly, man-agement has directed that the Glass Division be further segmented into product lines. Thefollowing information is available on the product lines in the Glass Division:Glass Division Product LinesSpecialtyGlassFlatAutoGlassGlassR300,000R100,000R200,000SalesR42,000R24,000R21,000R48,000R14,000R7,000Traceable fixed expenses:Advertising .DepreciationAdministrationVariable expenses as apercentage of salesR30,000R10,000R14,00040%50%65% 2. Management is surprised by Specialty Glass's poor showing and would like to have the pline segmented by market. The following information is available about the two markets inAnalysis shows that R60,000 of the Glass Division's administration expenses arc comnion to e1. Prepare a contribution format segmented income statement for the Glass Division with segmen,Chapter 13product lines.Required:defined as product lines.productwhich Specialty Glass is sold:Specialty Glass MarketsDomesticForeignR60,000R40,000SalesTraceable fixed expenses:Advertising .Variable expenses as aR18,000R30,00050%50%percentage of salesAll of Specialty Glass's depreciation and administration expenses are common to the mkets in which the product is sold. Prepare a contribution format segmented income statemefor Specialty Glass with segments defined as markets.3. Refer to the statement prepared in (1) above. The sales manager wants to run a special pro.motional campaign on one of the products over the next month. A market study indicates thasuch a campaign would increase sales of Flat Glass by R40,000 or sales of Auto Glass buR30,000. The campaign would cost R8,000. Show computations to determine which productline should be chosen.

A statement of earnings also knowns as a statement of operations or income statement is prepared to…

1. Prepare a contribution format segmented income statement for the Glass Division with segmen, Required: 2. Management is surprised by Specialty Glass's poor showing and would like to have the producr defined as product lines. line segmented by market. The following information is available about the two markets in which Specialty Glass is sold: Specialty Glass Markets Domestic Foreign R60,000 R40,000 Sales . Traceable fixed expenses: Advertising.. Variable expenses as a .. R18,000 R30,000 .. 50% 50% percentage of sales All of Specialty Glass's depreciation and administration expenses are common to the m kets in which the product is sold. Prepare a contribution format segmented income statem for Specialty Glass with segments defined as markets. 3. Refer to the statement prepared in (1) above. The sales manager wants to run a special pre motional campaign on one of the products over the next month. A market study indicates tha such a campaign would increase sales of Flat Glass by R40,000 or sales of Auto Glass bu R30,000. The campaign would cost R8,000. Show computations to determine which product line should be chosen.

1. Prepare a contribution format segmented income statement for the Glass Division with segmen, Required: 2. Management is surprised by Specialty Glass's poor showing and would like to have the producr defined as product lines. line segmented by market. The following information is available about the two markets in which Specialty Glass is sold: Specialty Glass Markets Domestic Foreign R60,000 R40,000 Sales . Traceable fixed expenses: Advertising.. Variable expenses as a .. R18,000 R30,000 .. 50% 50% percentage of sales All of Specialty Glass's depreciation and administration expenses are common to the m kets in which the product is sold. Prepare a contribution format segmented income statem for Specialty Glass with segments defined as markets. 3. Refer to the statement prepared in (1) above. The sales manager wants to run a special pre motional campaign on one of the products over the next month. A market study indicates tha such a campaign would increase sales of Flat Glass by R40,000 or sales of Auto Glass bu R30,000. The campaign would cost R8,000. Show computations to determine which product line should be chosen.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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