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Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statenent For the Month inded June 10 Sales Variable expenses Contribution margin $ 900,000 408,000 Fixed expenses Net operating income Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: a. The company is divided into two sales territories-Northem and Southern. The Northern Territory recorded $400,000 in sales and $168,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $204,000 and $120.000 are traceable to the Northern and Southern Territories, respectively. The rest of the foxed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $210,000 and $190,000, respectively, in the Northern territory during June. Variable expenses are 23% of the selling price for Paks and 63% for Tibs. Cost records show that S90,300 of the Northern Territory's fixed expenses are tracesble to Paks and $34,200 to Tibs, with the remainder common to the two products. Required: 1-a. Prepare contribution format segmented income statements for the total company broken down between sales territories. 1-b. Prepare contribution format segmented income statements for the Northern Territory broken down by product line.

Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statenent For the Month inded June 10 Sales Variable expenses Contribution margin $ 900,000 408,000 Fixed expenses Net operating income Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: a. The company is divided into two sales territories-Northem and Southern. The Northern Territory recorded $400,000 in sales and $168,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $204,000 and $120.000 are traceable to the Northern and Southern Territories, respectively. The rest of the foxed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $210,000 and $190,000, respectively, in the Northern territory during June. Variable expenses are 23% of the selling price for Paks and 63% for Tibs. Cost records show that S90,300 of the Northern Territory's fixed expenses are tracesble to Paks and $34,200 to Tibs, with the remainder common to the two products. Required: 1-a. Prepare contribution format segmented income statements for the total company broken down between sales territories. 1-b. Prepare contribution format segmented income statements for the Northern Territory broken down by product line.

FINANCIAL ACCOUNTING
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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### Vulcan Company's Contribution Format Income Statement #### Vulcan Company's Contribution Format Income Statement for June The income statement for Vulcan Company is detailed as follows: **Vulcan Company Income Statement for the Month Ended June 30** - **Sales**: $980,000 - **Variable expenses**: $488,000 - **Contribution margin**: $492,000 - **Fixed expenses**: $455,000 - **Net operating income**: $37,000 Management has expressed disappointment with the company's performance and is exploring ways to increase profits. Analyzing sales and cost records has led to the following determinations: 1. **Sales Territories**: - The company is divided into two sales territories—Northern and Southern. - Northern Territory recorded $400,000 in sales and $168,000 in variable expenses during June. - The remaining sales and variable expenses were recorded in the Southern Territory. - Fixed expenses of $204,000 and $120,000 are traceable to the Northern and Southern Territories, respectively. The remaining fixed expenses are common to both territories. 2. **Product Lines**: - The company exclusively distributes two products—Paks and Tibs. - Sales of Paks and Tibs totaled $210,000 and $190,000, respectively, in the Northern Territory during June. - Variable expenses are 23% of the selling price for Paks and 63% for Tibs. - Cost records show that $90,300 of the Northern Territory’s fixed expenses are traceable to Paks and $34,200 to Tibs, with the remainder common to both products. #### Requirements: 1. **Requirement 1A**: - Prepare contribution format segmented income statements for the total company, broken down by sales territories. 2. **Requirement 1B**: - Prepare contribution format segmented income statements for the Northern Territory, broken down by product line. ### Data Entry Section: Complete the questions by entering your answers in the tabs provided. **Req 1A and Req 1B** 1. **Req 1A**: - Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round the percentage answers to one decimal place). **Table Structure**: | | Total Company | | | Sales Territory | | | |-----------------------|---------------|------------
Transcribed Image Text:### Vulcan Company's Contribution Format Income Statement #### Vulcan Company's Contribution Format Income Statement for June The income statement for Vulcan Company is detailed as follows: **Vulcan Company Income Statement for the Month Ended June 30** - **Sales**: $980,000 - **Variable expenses**: $488,000 - **Contribution margin**: $492,000 - **Fixed expenses**: $455,000 - **Net operating income**: $37,000 Management has expressed disappointment with the company's performance and is exploring ways to increase profits. Analyzing sales and cost records has led to the following determinations: 1. **Sales Territories**: - The company is divided into two sales territories—Northern and Southern. - Northern Territory recorded $400,000 in sales and $168,000 in variable expenses during June. - The remaining sales and variable expenses were recorded in the Southern Territory. - Fixed expenses of $204,000 and $120,000 are traceable to the Northern and Southern Territories, respectively. The remaining fixed expenses are common to both territories. 2. **Product Lines**: - The company exclusively distributes two products—Paks and Tibs. - Sales of Paks and Tibs totaled $210,000 and $190,000, respectively, in the Northern Territory during June. - Variable expenses are 23% of the selling price for Paks and 63% for Tibs. - Cost records show that $90,300 of the Northern Territory’s fixed expenses are traceable to Paks and $34,200 to Tibs, with the remainder common to both products. #### Requirements: 1. **Requirement 1A**: - Prepare contribution format segmented income statements for the total company, broken down by sales territories. 2. **Requirement 1B**: - Prepare contribution format segmented income statements for the Northern Territory, broken down by product line. ### Data Entry Section: Complete the questions by entering your answers in the tabs provided. **Req 1A and Req 1B** 1. **Req 1A**: - Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round the percentage answers to one decimal place). **Table Structure**: | | Total Company | | | Sales Territory | | | |-----------------------|---------------|------------
**Vulcan Company's Contribution Format Income Statement for June** **Income Statement** - **Sales for the Month Ended June 30** - Sales: $800,000 - Variable Expenses: $408,000 - Contribution Margin: $392,000 - Fixed Expenses: $455,000 - Net Operating Income (Loss): $(63,000) *Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following:* a. The company is divided into two sales territories—Northern and Southern. - **Northern Territory:** - Sales: $400,000 - Variable Expenses: $168,000 - **Southern Territory:** - Remaining sales and variable expenses are recorded here. - Fixed Expenses: - $204,000 (traceable to the Northern Territory) - $120,000 (traceable to the Southern Territory) - Rest of the fixed expenses is common to both territories. b. The company is the exclusive distributor for two products—Paks and Tibs. - **Sales in Northern Territory for June:** - Paks: $210,000 - Tibs: $190,000 - Variable Expenses as a percentage of selling price: - Paks: 23% - Tibs: 63% - Fixed Expenses Traceable in Northern Territory: - $90,300 traceable - Paks: $56,100 - Tibs: $34,200 - Remaining fixed expenses are common to the two products. **Required:** 1. Prepare contribution format segmented income statements for the total company broken down between sales territories. 2. Prepare contribution format segmented income statements for the Northern Territory broken down by product line. **Task Instructions:** - Enter answers using one decimal point (e.g., 12.3). **Table Template for Northern Territory, Including Product Lines Paks and Tibs:** Prepare contribution format segmented income statements for the Northern Territory, broken down by product line, in the table below: | Northern Territory | Product Line | | | |-----------------------|--------------|---------|-----------| | | | Paks | Tibs | | **Amount** | Sales | (to be filled) | (to be
Transcribed Image Text:**Vulcan Company's Contribution Format Income Statement for June** **Income Statement** - **Sales for the Month Ended June 30** - Sales: $800,000 - Variable Expenses: $408,000 - Contribution Margin: $392,000 - Fixed Expenses: $455,000 - Net Operating Income (Loss): $(63,000) *Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following:* a. The company is divided into two sales territories—Northern and Southern. - **Northern Territory:** - Sales: $400,000 - Variable Expenses: $168,000 - **Southern Territory:** - Remaining sales and variable expenses are recorded here. - Fixed Expenses: - $204,000 (traceable to the Northern Territory) - $120,000 (traceable to the Southern Territory) - Rest of the fixed expenses is common to both territories. b. The company is the exclusive distributor for two products—Paks and Tibs. - **Sales in Northern Territory for June:** - Paks: $210,000 - Tibs: $190,000 - Variable Expenses as a percentage of selling price: - Paks: 23% - Tibs: 63% - Fixed Expenses Traceable in Northern Territory: - $90,300 traceable - Paks: $56,100 - Tibs: $34,200 - Remaining fixed expenses are common to the two products. **Required:** 1. Prepare contribution format segmented income statements for the total company broken down between sales territories. 2. Prepare contribution format segmented income statements for the Northern Territory broken down by product line. **Task Instructions:** - Enter answers using one decimal point (e.g., 12.3). **Table Template for Northern Territory, Including Product Lines Paks and Tibs:** Prepare contribution format segmented income statements for the Northern Territory, broken down by product line, in the table below: | Northern Territory | Product Line | | | |-----------------------|--------------|---------|-----------| | | | Paks | Tibs | | **Amount** | Sales | (to be filled) | (to be
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