2 Vulcan Company\'s contribution format income statement for June is as follows

Question

2 Vulcan Company's contribution format income statement for June is as follows Vulcan Company Income Statement 10 points For the Month Ended June 30 Sales Variable expenses 00,000 Contribution margin 500,000 Fixed expenses Net operating income $800,000 470,000 eBook $ 30,000 Print 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 ReferencE a. The company is divided into two sales territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $216,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $152,000 and $96,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed 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 $100,000 and $300,000, respectively, in the Northern territory during June. Variable expenses are 15% of the selling price for Paks and 67% for Tibs. Cost records show that $51,000 of the Northern Territory's fixed expenses are traceable to Paks and $72,000 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 Complete this question by entering your answers in the tabs below. Req 1A Req 1B Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round the percentage answers to one decimal place (i.e .1234 should be entered as 12.3).) Sales Territo Total Company Amount Northern Southern Amount Amount

Explanation / Answer

Sales Territory Total Company Northern Southern Amount % Amount % Amount %   Sales $800,000 100.0% 400000 100.0% 400000 100.0%   Variable expenses $300,000 37.5% 216,000 54.0% 84,000 21.0%   Contribution margin $500,000 62.5% 184,000 46.0% 316,000 79.0%   Traceable fixed expenses $248,000 31.0% 152,000 38.0% 96,000 24.0%   Sales territory segment margin $252,000 31.5% $32,000 8.0% $220,000 55.0%   Common fixed expenses 222,000 27.8%   Net operating income $30,000 3.8% Product Line Northern Territory Paks Tibs Amount % Amount % Amount %   Sales $400,000 100.0% 100000 100.0% 300000 100.0%   Variable expenses $216,000 54.0% 15,000 15.0% 201,000 67.0%   Contribution margin $184,000 46.0% 85,000 85.0% 99,000 33.0%   Traceable fixed expenses $123,000 30.8% 51,000 51.0% 72,000 24.0%   Product line segment margin $61,000 15.3% $34,000 34.0% $27,000 9.0%   Common fixed expenses 29,000 7.3%   Sales territory segment margin $32,000 8.0%

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