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). Divisions Total Company North South Amount % Amount % Amount %
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). Divisions Total Company North South Amount % Amount % Amount %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vikram Bhai
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Step 1: Introduce to income statement
VIEWStep 2: Working for sales revenue for each division
VIEWStep 3: Working for contribution margin and variable expenses of each division
VIEWStep 4: Working for segment margin of each division
VIEWStep 5: Working for traceable fixed expenses of each division
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