Royal Lawncare Company produces and sells two packaged products, Weedban and Gre

Question

Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information relating to the products follow:

  

Product

  

Common fixed expenses in the company total $97,000 annually. Last year the company produced and sold 44,000 units of Weedban and 15,500 units of Greengrow.

  

Prepare a contribution format income statement segmented by product lines.

Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information relating to the products follow:

Explanation / Answer

Answer:-

Contribution format income statement Particulars Weedban Greengrow Total $ $ $ Sales 44000 units*$10 per unit =440000 15500 units*$39 per unit =604500 1044500 Less:- Variable cost 44000 units*$2.20 per unit =96800 15500 units*$12 per unit =186000 282800 Contribution margin 343200 418500 761700 Less:-Traceble fixed expenses 134000 41000 175000 Segment margin 209200 377500 586700 Less:-Common fixed expenses 97000 Net opreating income 489700

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