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vero S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income atement in terms of the Brazilian currency, the real, R) for last month is given below Divisions Leather Cloth R2,700,000 R1,890,000 1,130,000 969,700 Analysis shows that R75,000 of the Leather Division's selling and administrative expenses are common to the product nes. Required: 1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines. Total Company Sales R4,590,000 Wariable expenses 2,099,700 Contribution margin 2,490,300 1,570,000 920,300 Traceable fixed Selling and expenses: Advertising administrative Depreciation expenses 785,000 470,000 315,000 614,000 380,000 234,000 263,000 132,000 131,000 Total traceable fixed 1,662,000 982,000 680,000 Divisional segment margin 828,300 R 588,000 R 240,300 Common fixed expenses 407,000 R 421,300 Operating income p management can't understand why the Leather Division has such a low segment margin when its sales are only % less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the ather Division be further segmented into product lines. The following information is available on the product lines in Leather Division: Sales Traceable fixed expenses: Advertising Selling and administrative Depreciation Wariable expenses as a percentage of sales Leather Division Product Lines Shoes R800,000 Garments R670,000 R 97,000 R 84,000 R 47,000 R 52,000 R 36,000 R 73,000 65% Handbags R420,000 R134,000 R 60,000 R 22,000 40% 51% Sales Variable expenses Contribution margin Traceable fixed expenses: Advertising Selling & administrative Depreciation Total traceable fixed expenses Divisional segment margin Common fixed expenses: Depreciation Product line segment margin Product Line Leather Division Garments Shoes Handbag о 이 ° 이 OR OR

vero S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income atement in terms of the Brazilian currency, the real, R) for last month is given below Divisions Leather Cloth R2,700,000 R1,890,000 1,130,000 969,700 Analysis shows that R75,000 of the Leather Division's selling and administrative expenses are common to the product nes. Required: 1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines. Total Company Sales R4,590,000 Wariable expenses 2,099,700 Contribution margin 2,490,300 1,570,000 920,300 Traceable fixed Selling and expenses: Advertising administrative Depreciation expenses 785,000 470,000 315,000 614,000 380,000 234,000 263,000 132,000 131,000 Total traceable fixed 1,662,000 982,000 680,000 Divisional segment margin 828,300 R 588,000 R 240,300 Common fixed expenses 407,000 R 421,300 Operating income p management can't understand why the Leather Division has such a low segment margin when its sales are only % less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the ather Division be further segmented into product lines. The following information is available on the product lines in Leather Division: Sales Traceable fixed expenses: Advertising Selling and administrative Depreciation Wariable expenses as a percentage of sales Leather Division Product Lines Shoes R800,000 Garments R670,000 R 97,000 R 84,000 R 47,000 R 52,000 R 36,000 R 73,000 65% Handbags R420,000 R134,000 R 60,000 R 22,000 40% 51% Sales Variable expenses Contribution margin Traceable fixed expenses: Advertising Selling & administrative Depreciation Total traceable fixed expenses Divisional segment margin Common fixed expenses: Depreciation Product line segment margin Product Line Leather Division Garments Shoes Handbag о 이 ° 이 OR OR

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement (in terms of the Brazilian currency, the real, R) for last month is given below. Divisions Leather Cloth R2,700,000 R1,890,000 1,130,000 969,700 1,570,000 920,300 Total Company Sales R4,590,000 Variable expenses 2,099,700 Contribution margin 2,490,300 785,000 470,000 315,000 614,000 380,000 234,000 263,000 132,000 131,000 Total traceable fixed 1,662,000 982,000 680,000 Analysis shows that R75,000 of the Leather Division's selling and administrative expenses are common to the product ines. Required: 1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines. Traceable fixed expenses: Advertising Selling and administrative Depreciation expenses Divisional segment 828,300 R 588,000 R 240,300 margin Common fixed expenses 407,000 R 421,300 Operating income Top management can't understand why the Leather Division has such a low segment margin when its sales are only 30% less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the Leather Division be further segmented into product lines. The following information is available on the product lines in the Leather Division: Sales Variable expenses Contribution margin Traceable fixed expenses: Advertising Selling & administrative Depreciation Total traceable fixed expenses Divisional segment margin Common fixed expenses: Depreciation Product line segment margin Product Line Leather Division Garments Shoes Handbag ° ° 이 0 OR OR R 이 Sales Traceable fixed expenses: Advertising Selling and administrative Depreciation Variable expenses as a percentage of sales R670,000 Shoes R800,000 Leather Division Product Lines Garments Handbags R420,000 R 97,000 R 84,000 R134,000 R 47,000 R 52,000 R 36,000 R 73,000 65% 40% R 60,000 R 22,000 51%
Transcribed Image Text:Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement (in terms of the Brazilian currency, the real, R) for last month is given below. Divisions Leather Cloth R2,700,000 R1,890,000 1,130,000 969,700 1,570,000 920,300 Total Company Sales R4,590,000 Variable expenses 2,099,700 Contribution margin 2,490,300 785,000 470,000 315,000 614,000 380,000 234,000 263,000 132,000 131,000 Total traceable fixed 1,662,000 982,000 680,000 Analysis shows that R75,000 of the Leather Division's selling and administrative expenses are common to the product ines. Required: 1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines. Traceable fixed expenses: Advertising Selling and administrative Depreciation expenses Divisional segment 828,300 R 588,000 R 240,300 margin Common fixed expenses 407,000 R 421,300 Operating income Top management can't understand why the Leather Division has such a low segment margin when its sales are only 30% less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the Leather Division be further segmented into product lines. The following information is available on the product lines in the Leather Division: Sales Variable expenses Contribution margin Traceable fixed expenses: Advertising Selling & administrative Depreciation Total traceable fixed expenses Divisional segment margin Common fixed expenses: Depreciation Product line segment margin Product Line Leather Division Garments Shoes Handbag ° ° 이 0 OR OR R 이 Sales Traceable fixed expenses: Advertising Selling and administrative Depreciation Variable expenses as a percentage of sales R670,000 Shoes R800,000 Leather Division Product Lines Garments Handbags R420,000 R 97,000 R 84,000 R134,000 R 47,000 R 52,000 R 36,000 R 73,000 65% 40% R 60,000 R 22,000 51%
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