ABC Company segments its income statement into its North and South Divisions. The company's overall sales, contribution marginratio, and net operating income are $790,000, 48%, and $15,800, respectively. The North Division's contribution margin andcontribution margin ratio are $150,800 and 52%, respectively. The South Division's segment margin is $95,000. The company has$150,100 of common fixed expenses that cannot be traced to either division.Required:Prepare an income statement for ABC Company that uses the contribution format and is segmented by divisions. In addition, for thecompany as a whole and for each segment, show each item on the segmented income statements as a percent of sales. (Round yourpercentage answers to 1 decimal place (i.e .1234 should be entered as 12.3).)Total CompanyAmount%AmountQ SearchNorth%DivisionsSavedAmount< PrevSouth16 of 21lyi%Next >

The contribution margin is calculated as the difference between sales and variable costs. The…

Answered: ABC Company segments its income…

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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Vishnu
The single-column CVP income statements shown below are available for Wildhorse Company and Blossom Company, Sales Variable costs Contribution margin Fixed costs Net income Wildhorse Wildhorse Co. Blossom $495,000 239,000 256,000 1000 156,000 $100,000 Blossom Co. Degree of Operating Leverage $495,000 (a1) Compute the degree of operating leverage for each company. (Round answers to 2 decimal places, e.g. 1.15.) $ 51,000 444,000 344,000 $100,000 (b) Assuming that sales revenue increases by 10% (due to a 10% increase in the number of units sold), prepare a single-plumn CVP income statement for each company. Wildhorse Company $ tA $ Blossom Company
A company has four divisions. Division A has sales, variable expenses and traceable fixed expenses of 200,000, 103,000, 33,000, respectively. If the company as a whole has common fixed expenses of 50,000. What is division A’s segment Margin?
Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $43,000 for Division A. Division B had a contribution margin ratio of 30% and its sales were $240,000. Net operating income for the company was $35,200 and traceable fixed expenses were $50,400. Corbel Corporation's common fixed expenses were:
Sagar
Sagar
The following income statements illustrate different cost structures for two competing companies: Income Statements Company Name Perez Munoz Number of customers (a) 81 81 Sales revenue (a × $250) $ 20,250 $ 20,250 Variable cost (a × $175) N/A (14,175 ) Variable cost (a × $0) 0 N/A Contribution margin 20,250 6,075 Fixed cost (14,175 ) 0 Net income $ 6,075 $ 6,075 Required Reconstruct Perez’s income statement, assuming that it serves 162 customers when it lures 81 customers away from Munoz by lowering the sales price to $150 per customer. Reconstruct Munoz’s income statement, assuming that it serves 162 customers when it lures 81 customers away from Perez by lowering the sales price to $150 per customer.
Gough Corporation has two divisions. Domestic and Foreign. Data from the most recent month appears below: 6. Total Company $668,000 Domestic Foreign $321,000 147,660 173,340 134,000 $ 39,340 Sales... Variable expenses. Contribution margin. Traceable fixed expenses. 220,530 447,470 335,000 112,470 $347,000 72,870 274,130 201,000 $ 73,130 Segment margin.. Common fixed expenses.. 73,480 $ 38,990 Net operating income.. The break-even in sales dollars for the company as a whole is closest to: A. $502,579 B. $107,216 C. $436,424 D. $609,794
Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format segmented income statement as shown: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $ 937,500 637,500 300,000 142,000 158,000 62,000 $ 96,000 North $ 750,000 600,000 150,000 71,000 $ 79,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. South $ 187,500 37,500 150,000 71,000 $ 79,000
JPL Company has two segments - Retail and Commercial. The Retail segment has a contribution margin ratio of 40% and traceable fixed expenses of $70,000. Commercial has traceable fixed expenses of $50,000 and a contribution margin ratio of 55%. The company also has $30,000 of common fixed expenses. The break-even point in dollar sales for the Retail segment equals O $175,000 O $250,000 O $212,500 O $116,667
Stryker corp. Has two major business segments- east and west. In April, the east business segment had sales revenue of 500,000, variable expenses of 280,000 and traceable fixed expenses of 80,000. During the same month, the west business segment had sales revenues of 970,000, variable expenses of 514,000 and traceable fixed expenses of 184,000. The common fixed expenses total 280,000 and were allocated as follows: 112,000 to the east business segment and 168,000 to the west business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the east business segment is: 108,000 28,000 140,000 280,000
Piedmont Company segments its business into two regions-North and South. The company prepared the contribution format segmented income statement as shown: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $ 825,000 495,000 330,000 144,000 186,000 64,000 $ 122,000 1. Dollar sales for company to break even 2. Dollar sales for North segment to break even 3. Dollar sales for South segment to break even North $ 550,000 385,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. 165,000 72,000 $ 93,000 $ $ $ Note: For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar. South $ 275,000 110,000 165,000 72,000 $ 93,000 5,200 x 2,400 X 1,200 x

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