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. P1,500,000 588,000 912,000 945,000 P (33,000) Net'operating loss... 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 P500,000 Sales P400,000 P600,000 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.
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. P1,500,000 588,000 912,000 945,000 P (33,000) Net'operating loss... 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 P500,000 Sales P400,000 P600,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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 .
P1,500,000
588,000
912,000
945,000
P (33,000)
Net 'operating loss.
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
Сentral
East
West
P500,000
Sales.
P400,000
P600,000
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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe6ff66bb-88c5-4c95-bc9e-68c9173ed0b2%2F3635bb94-0820-42dc-af2a-d662991cb009%2Fthfd44_processed.jpeg&w=3840&q=75)
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 .
P1,500,000
588,000
912,000
945,000
P (33,000)
Net 'operating loss.
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
Сentral
East
West
P500,000
Sales.
P400,000
P600,000
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.
![2. The company's sales manager believes that sales Central geographic
market could be increased by 15% if advertising were increased by
P25,000 each month. Would you recommend the increased advertising?
Show computations to support your answer.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe6ff66bb-88c5-4c95-bc9e-68c9173ed0b2%2F3635bb94-0820-42dc-af2a-d662991cb009%2Fauvx74_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. The company's sales manager believes that sales Central geographic
market could be increased by 15% if advertising were increased by
P25,000 each month. Would you recommend the increased advertising?
Show computations to support your answer.
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