Georgetown Corporation has two major business segments-Hats and Scarfs. Dataconcerning those segments for October appear below:Sales revenues, Hats$130,000Variable expenses, Hats$66,000Traceable fixed expenses, Hats$17,000Sales revenues, Scarfs$540,000Variable expenses, Scarfs$270,000Traceable fixed expenses, Scarfs $92,000Common fixed expenses totaled $153,000.Required:Prepare a segmented income statement in the contribution format for the company.Omit percentages; show only dollar amounts.the break-even point in sales for the company as a whole.No Heading Required. Also calculate

The main purpose of the income statement is to show how much profit or loss an organization…

Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts. the break-even point in sales for the company as a whole. No Heading Required. Also calculate

Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts. the break-even point in sales for the company as a whole. No Heading Required. Also calculate

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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Fill in the missing amounts in each of the eight cases below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.) Required: a. Assume that only one product is being sold in each of the four following case situations: b. Assume that more than one product is being sold in each of the four following case situations: Complete this question by entering your answers in the tabs below. Required A Required B Assume that more than one product is being sold in each of the four following case situations: Sales Variable expenses Fixed expenses Net operating income (loss) Contribution margin ratio (percent) $ $ Case 1 442,000 75,060 43 % $ Case 2 198,000 132,660 68,000 % $ Case 3 470,000 82,210 79 % $ Case 4 304,000 94,240 $ (19,240) %
First step - you need to understand each individual components of the income statement (also called a Profit & Loss Statement or P&L Statement): Sales (Revenue) The sales figure represents the amount of revenue generated by the business. It is calculated as the total of the number of units sold multiplied by the selling price per unit. The amount recorded here is the total sales, minus any product returns or sales discounts. Cost of Goods Sold This number represents the costs directly associated with making or acquiring your products. Costs include materials purchased from outside suppliers used in the manufacture of your product, as well as any internal expenses directly expended in the manufacturing process. In a service business where you, as the owner, are the only expense in supplying the service, and you do not pay yourself a salary beyond the company profits, your service expense may be zero. However, in a service business where you pay yourself a salary or have…
Do all companies use cost-volume-profit charts
A CVP income statement shows contribution margin and gross profit. True False
1. What is a segment of an organization? Give a few examples of segments of Walmart Corporation. 2. What costs are assigned to a segment under the contribution approach? 3. Distinguish between a traceable fixed cost and a common fixed cost. 4. Explain how the contribution margin is different from the segment margin. 5. Why aren't common fixed costs allocated to segments under the contribution approach?
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(Multiple Choice) A multi-step income statement ________. A. separates cost of goods sold from operating expenses B. considers interest revenue an operating activity C. is another name for a simple income statement D. combines cost of goods sold and operating expenses
Customer relationship management software would be most likely to affect which income statement account? Multiple Choice Cost of Goods Sold Revenues Selling, General, and Administrative Expenses (SG&A) Interest Expense
When using data from a segmented income statement, the dollar sales for a segment to break even is equal to: Multiple Choice Common fixed expenses ÷ Segment CM ratio Traceable fixed expenses ÷ Segment CM ratio Non-traceable fixed expenses ÷ Segment CM ratio (Traceable fixed expenses + Common fixed expenses) ÷ Segment CM ratio
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