Royal Lawncare Company produces and sells two packaged products-Weedban and Gree

Question

Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow Product Weedban Greengrow 9.00 33.00 Selling price per unit Variable expenses per unit $2.30 11.00 Traceable fixed expenses per year 129,000 $39,000 Common fixed expenses in the company total $113,000 annually. Last year the company produced and sold 39,000 units of Weedban and 19,000 units of Greengrow. Required Prepare a contribution format income statement segmented by product lines. Product Line Total Company Weedban Greengrow

Explanation / Answer

Total company Weedban Greengrow sales 978000 39000*9=351000 19000*33=627000 less:variable expense (298700) 39000*2.3=(89700) 19000*11=(209000) contribution margin 679300 261300 418000 less:fixed cost (168000) (129000) (39000) segment margin 511300 132300 379000 lesS:common fixed cost (113000) net operating income 398300

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