Shannon Company segments its income statement into North and South Divisions. The company's overall sales, contribution margin ratio, and net operating income are $1,050,000, 40%, and $21,000, respectively. The North Division's contribution margin and contribution margin ratio are $154,000 and 44%, respectively. The South Division's segment margin is $175,000. The company has $262,500 of common fixed expenses that cannot be traced to either division. Required: Prepare a segmented income statement for Shannon Company using the contribution format. For the company as a whole and for each division, show each item on the segmented income statements as a percent of sales. Note: Round your percentage answers to 1 decimal place (i.e.1234 should be entered as 12.3).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Shannon Company segments its income statement into North and South Divisions. The company's overall sales, contribution margin
ratio, and net operating income are $1,050,000, 40%, and $21,000, respectively. The North Division's contribution margin and
contribution margin ratio are $154,000 and 44%, respectively. The South Division's segment margin is $175,000. The company has
$262,500 of common fixed expenses that cannot be traced to either division.
Required:
Prepare a segmented income statement for Shannon Company using the contribution format. For the company as a whole and for
each division, show each item on the segmented income statements as a percent of sales.
Note: Round your percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3).
Total Company
Amount
%
Amount
North
%
Divisions
Amount
South
%
Transcribed Image Text:Shannon Company segments its income statement into North and South Divisions. The company's overall sales, contribution margin ratio, and net operating income are $1,050,000, 40%, and $21,000, respectively. The North Division's contribution margin and contribution margin ratio are $154,000 and 44%, respectively. The South Division's segment margin is $175,000. The company has $262,500 of common fixed expenses that cannot be traced to either division. Required: Prepare a segmented income statement for Shannon Company using the contribution format. For the company as a whole and for each division, show each item on the segmented income statements as a percent of sales. Note: Round your percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3). Total Company Amount % Amount North % Divisions Amount South %
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