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Answer 1 and 2

Answer 1 and 2

FINANCIAL ACCOUNTING
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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Answer 1 and 2

Problem 2 (Segmented Income Statement) Sterling Company, a wholesale distributor of DVDS, has been experiencing losses for some time, as shown by its most recent monthly income statement below: Sales.... Less variable expenses.... Contribution margin Less fixed expenses. Net operating loss... P1,500,000 588,000 912,000 945,000 P (33,000) In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly, the Accounting Department has developed the following data: Geographic Market Central East West Sales... P400,000 P600,000 P500,000 Variable expenses as a percentage of sales. . Traceable fixed expenses.... 52% 30% 40% P240,000 P330,000 P200,000 Required: 1. Prepare an income statement segmented by geographic market, as desired by the president. Show both Amount and Percent columns for the company as a whole and for each geographic market. Carry percentage computations to one decimal place.
Transcribed Image Text:Problem 2 (Segmented Income Statement) Sterling Company, a wholesale distributor of DVDS, has been experiencing losses for some time, as shown by its most recent monthly income statement below: Sales.... Less variable expenses.... Contribution margin Less fixed expenses. Net operating loss... P1,500,000 588,000 912,000 945,000 P (33,000) In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly, the Accounting Department has developed the following data: Geographic Market Central East West Sales... P400,000 P600,000 P500,000 Variable expenses as a percentage of sales. . Traceable fixed expenses.... 52% 30% 40% P240,000 P330,000 P200,000 Required: 1. Prepare an income statement segmented by geographic market, as desired by the president. Show both Amount and Percent columns for the company as a whole and for each geographic market. Carry percentage computations to one decimal place.
250 Chapter 9 2. The company's sales manager believes that sales Central geographis market could be increased by 15% if advertising were increased by P25.000 each month. Would you recommend the increased advertisine? Show computations to support your answer.
Transcribed Image Text:250 Chapter 9 2. The company's sales manager believes that sales Central geographis market could be increased by 15% if advertising were increased by P25.000 each month. Would you recommend the increased advertisine? Show computations to support your answer.
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