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Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporatewide fixed expenses as described. Note: Round intermediate calculations to 2 decimal places.

Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporatewide fixed expenses as described. Note: Round intermediate calculations to 2 decimal places.

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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Sales Variable expenses Contribution margin Fixed expenses Operating income Segmented Income Statement For the Year Ended December 31, 2022 Total Company Product A $ 593,000 276,000 $ 297,000 152,000 $ 317,000 280,000 $ 145,000 167,000 $ 37,000 $ (22,000) Total Company $ 102,000 Product B $ 123,000 51,000 $ 72,000 43,000 $ 29,000 The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend to the president whether to continue or discontinue the product. During your investigation, you discover that certain fixed expenses are traceable directly to each product line as indicated here: Product A $ 74,000 Product C $ 173,000 73,000 $ 100,000 70,000 $ 30,000 Product B $9,000 Product C $ 19,000 Direct fixed expenses The remaining fixed expenses are considered to be corporatewide expenses that have been allocated to each product lin based on sales revenue. Required A Required B Required C Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporatewide fixed expenses as described. Note: Round intermediate calculations to 2 decimal places. XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2022 Total Company Sales Variable expenses Contribution margin Direct fixed expenses Common fixed expenses Operating income/loss Required A Required B $ Sales Variable expenses Contribution margin Direct fixed expenses Segment margin Common fixed expenses Operating income/loss $ 0 $ 0 $ Required C $ Product B 0 o s 0 $ Starting with the segmented income statement, use the information you discovered during your investigation to present a more appropriately designed segmented income statement. XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2022 Total Company Product A 0 $ 0 $ 0 Product C 0 0 0 0 $ Product B 0 Product C 0 $ 0 0
Transcribed Image Text:Sales Variable expenses Contribution margin Fixed expenses Operating income Segmented Income Statement For the Year Ended December 31, 2022 Total Company Product A $ 593,000 276,000 $ 297,000 152,000 $ 317,000 280,000 $ 145,000 167,000 $ 37,000 $ (22,000) Total Company $ 102,000 Product B $ 123,000 51,000 $ 72,000 43,000 $ 29,000 The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend to the president whether to continue or discontinue the product. During your investigation, you discover that certain fixed expenses are traceable directly to each product line as indicated here: Product A $ 74,000 Product C $ 173,000 73,000 $ 100,000 70,000 $ 30,000 Product B $9,000 Product C $ 19,000 Direct fixed expenses The remaining fixed expenses are considered to be corporatewide expenses that have been allocated to each product lin based on sales revenue. Required A Required B Required C Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporatewide fixed expenses as described. Note: Round intermediate calculations to 2 decimal places. XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2022 Total Company Sales Variable expenses Contribution margin Direct fixed expenses Common fixed expenses Operating income/loss Required A Required B $ Sales Variable expenses Contribution margin Direct fixed expenses Segment margin Common fixed expenses Operating income/loss $ 0 $ 0 $ Required C $ Product B 0 o s 0 $ Starting with the segmented income statement, use the information you discovered during your investigation to present a more appropriately designed segmented income statement. XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2022 Total Company Product A 0 $ 0 $ 0 Product C 0 0 0 0 $ Product B 0 Product C 0 $ 0 0
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