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: selling price per unit Variable expenses per unit Traceable fixed expenses per year Product Weedban Greengrow $ 11.00 34.00 $ 2.50 15.00 136,000 48,000 Common fixed expenses in the company total $98,000 annually. Last year the company produced and sold 36,500 units of Weedban and 22,500 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines. Product Line Total Company Weedban Greengrow

Explanation / Answer

Prepare contribution format income segment :

Product Line Total company Weedban Greengrow Sales 1166500 401500 765000 Variable cost 428750 91250 337500 Contribution margin 737750 310250 427500 Traceable fixed expense 184000 136000 48000 Segment margin 553750 174250 379500 Common fixed expense 98000 Net operating income 455750

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