Writing, Inc., has two product lines. The September income statements of each pr
ID: 2412451 • Letter: W
Question
Writing, Inc., has two product lines. The September income statements of each product line and the company are as follows:
Pens and pencils are sold in two territories, Vermont and Washington, as follows:
The common fixed expenses are traceable to each territory as follows:
The direct fixed expenses of pens, $13,500, and of pencils, $10,500, cannot be identified with either territory. The company's accountants were unable to allocate any of the common fixed expenses to the various segments.
Prepare income statements segmented by territory for September, including a column for the entire firm. Do not use negative signs with your answers.
Writing, INC.Product Line and Company Income Statements
For Month of September Pens Pencils Total Sales $ 45,000 $ 45,000 $ 90,000 Less variable expenses (18,000) (18,000) (36,000) Contribution margin 27,000 27,000 54,000 Less direct fixed expenses (13,500) (10,500) (24,000) Product margin $ 13,500 $ 16,500 30,000 Less common fixed expenses (9,000) Net income $ 21,000 QUESTION 5 Tries remaining:1 Points out of 15.00 question Income Statements Segmented by Territory Writing, Inc., has two product lines. The September income statements of each product line and the company are as follows: Writing, INC. Product Line and Company Income Statements For Month of September Pens Pencils Total Sales Less variable expenses Contribution margin Less direct fixed Product margin Less common fixed expenses Net income 45,000 $45,000 $90,000 (18,000) (18,000) (36,000) 27,000 27,000 54,000 d expenses 13500) 10,500) (24,000) s13.500 $16,500 30,000 9,000) $ 21,000 Pens and pencils are sold in two territories, Vermont and Washington, as follows: Vermont Washington Pen sales 27,000 18,000 31,500 $49,500 Pencil sales 13,500 Total sales 40,500 The common fixed expenses are traceable to each territory as follows Vermont fixed expenses Washington fixed expenses Home office administration fixed expenses Total common fixed expenses $3,000 4,500 1,500 $9,000
Explanation / Answer
Solution :
Writing Inc. Territory and Company Income Statements For the month of September Particulars Vermont Washington Total Sales: Pens $27,000.00 $18,000.00 $45,000.00 Pencils $13,500.00 $31,500.00 $45,000.00 Total sales $40,500.00 $49,500.00 $90,000.00 Variable costs: Pens $10,800.00 $7,200.00 $18,000.00 Pencils $5,400.00 $12,600.00 $18,000.00 Total $16,200.00 $19,800.00 $36,000.00 Contribution margin $24,300.00 $29,700.00 $54,000.00 Direct fixed expenses $3,000.00 $4,500.00 $7,500.00 Territory margin $21,300.00 $25,200.00 $46,500.00 Common fixed expenses: Pens $13,500.00 Pencils $10,500.00 Home office $1,500.00 Total $25,500.00 Net income $21,000.00Related Questions
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