Chapter 10, Problem 7E

Columbia Products Inc. has two divisions, Salem and Seaside. For the month ended March 31, Salem had sales and variable costs of $500,000 and $225,000, respectively, and Seaside had sales and variable costs of $800,000 and $475,000, respectively. Salem had direct fixed production and administrative expenses of $60,000 and $35,000, respectively, and Seaside had direct fixed production and administrative expenses of $80,000 and $45,000, respectively. Fixed costs that were common to both divisions and couldn’t be allocated to the divisions in any meaningful way were selling, $33,000, and administration, $27,000.

Prepare a segmented income statement by division for March.