Each drop down option: (Direct Costs, Contribution Margin, Operationg Income, Segment Margin, Variable Exspences, Allocated Exspences, Sales) Wildhorse, Inc. operates three divisions: Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. “Survival of the fittest, I say!” was his response when the Weak division’s manager, Chris, insisted that his division earned money for the company. The table below provides the most recent financial analysis for each division:| | Weak | Average | Strong ||---------------------|-----------|------------|-----------|| **Sales revenue** | $126,900 | $450,000 | $527,600 || **Variable expenses** | 57,000 | 246,000 | 300,500 || **Contribution margin** | 69,900 | 204,000 | 227,100 || **Direct expenses** | 30,600 | 77,800 | 113,200 || **Allocated expenses** | 69,000 | 69,000 | 69,000 || **Operating income** | $(29,700) | $57,200 | $44,900 |**Explanation of the Table:**- **Sales Revenue**: The total income generated from sales. The Weak division has the lowest at $126,900, while the Strong division has the highest at $527,600. - **Variable Expenses**: The expenses that vary with sales volume. The Weak division's variable expenses are $57,000 compared to Strong's $300,500. - **Contribution Margin**: Sales revenue minus variable expenses. This represents the portion of sales revenue that contributes to covering fixed costs and generating profit. Weak: $69,900, Average: $204,000, Strong: $227,100.- **Direct Expenses**: Expenses that can be directly attributed to the division's operations. Weak has $30,600 and Strong has $113,200.- **Allocated Expenses**: Indirect expenses distributed to each division equally, amounting to $69,000.- **Operating Income**: The profit after all expenses. The Weak division operates at a loss of $(29,700), while Average and Strong divisions report profits of $57,200 and $44,900, respectively. **Title: Preparing a Revised Income Statement with Segment Margins**This section helps you prepare a revised income statement that displays the segment margin for each division within a company. The income statement template is divided into three main segments labeled as "Weak," "Average," and "Strong," to categorize the performance of different divisions.**Layout of the Revised Income Statement:**- **Segment Columns:** - The table is split into three vertical columns titled "Weak," "Average," and "Strong," representing the performance levels of different divisions.- **Input Fields:** - Each column contains several input fields where monetary values can be entered. These fields are organized into four main rows for financial data input.- **Financial Data Entries:** - Each row corresponds to a different financial category or metric, such as revenue, expenses, or net income. - The input fields next to a dollar sign represent the financial figures attributed to each segment.- **Dropdown Menu:** - On the left side of each row is a dropdown menu, likely intended for selecting or labeling the type of financial data entered in the adjoining fields.- **Summary Calculations:** - At the bottom of each column are additional fields with double underlines, signifying total calculations or critical results, such as total segment margin or profit for each division.This structured layout allows users to input data systematically, facilitating the calculation of segment margins, essential for analyzing the financial health and performance of various divisions within an organization.

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Wildhorse, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. "Survival of the fittest, I say!" was his response when the Weak division's manager, insisted Chris, that his division earned money for the company. Following is the most recent financial analysis for each division: Weak Average Strong Sales revenue $ 126,900 $ 450,000 $ 527,600 Variable expenses 57,000 246,000 300,500 Contribution margin 69,900 204,000 227,100 Direct expenses 30,600 77,800 113,200 Allocated expenses 69,000 69,000 69,000 Operating income $( 29,700) $ 57,200 $ 44,900

Wildhorse, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. "Survival of the fittest, I say!" was his response when the Weak division's manager, insisted Chris, that his division earned money for the company. Following is the most recent financial analysis for each division: Weak Average Strong Sales revenue $ 126,900 $ 450,000 $ 527,600 Variable expenses 57,000 246,000 300,500 Contribution margin 69,900 204,000 227,100 Direct expenses 30,600 77,800 113,200 Allocated expenses 69,000 69,000 69,000 Operating income $( 29,700) $ 57,200 $ 44,900

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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