12:05 LTE ezto.mheducation.com Vulcan Company\'s contribution format income stat
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Question
12:05 LTE ezto.mheducation.com Vulcan Company's contribution format income statement for June is given below can be done to improve profits. By examining sales and cost records, you have determined the following a. The company is divided into teo sales temitories- Northerm and Southem. The Northem 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 Southem Territories, respectively. The rest of the Sxed expenses are common to the two bemitories. b. The company is the exclusive distributor for two products -Paks and Tbs. Sales of Paks and Tos totaled $100,000 and $300.000, respectively, in the Northem territory during June. Variable expenses are 15% of te seling price Paks and 67% for Tibs. Cost records show that S51.000 ofte Noten Territory's fixed expenses are traceable to Paks and $72.000 to Tbs, with the nemainder common to the two products 1a. Prepare contribution format segmented income statements for the total company broken down between sales temitories (Do not round your intermediate percentage answers and round your finall percentage answers to 1 decimal place (i ,1234 should be entered as 123. 1b. Prepare contrbution format segmented income statements for the Northem Territory broken down by product ine. (Do not round your intermediate percentage answers and round your final percentage answers to 1 decimal place (i.e..1234 should be entered as 12.3))Explanation / Answer
Hardeep
9,954 answers
1
Total company
Northern
Southern
Amount
%
Amount
%
Amount
%
Sales
800000
100.0%
400000
100.0%
400000
100.0%
Variable expenses
300000
37.5%
208000
52.0%
92000
23.0%
Contribution margin
500000
62.5%
192000
48.0%
308000
77.0%
Traceable fixed expenses
260000
32.5%
172000
43.0%
88000
22.0%
Territorial segment margin
240000
30.0%
20000
5.0%
220000
55.0%
Common fixed expenses
200000
25.0%
Net operating income
40000
5.0%
b
Northern Territory
Paks
Tibs
Sales
400000
100.0%
125000
100.0%
275000
100.0%
Variable expenses
208000
52.0%
37500
30.0%
170500
62.0%
Contribution margin
192000
48.0%
87500
70.0%
104500
38.0%
Traceable fixed expenses
135500
33.9%
75000
60.0%
60500
22.0%
Product line segment margin
56500
14.1%
12500
10.0%
44000
16.0%
Common fixed expenses
36500
9.1%
Sales territory segment margin
20000
5.0%
1
Total company
Northern
Southern
Amount
%
Amount
%
Amount
%
Sales
800000
100.0%
400000
100.0%
400000
100.0%
Variable expenses
300000
37.5%
208000
52.0%
92000
23.0%
Contribution margin
500000
62.5%
192000
48.0%
308000
77.0%
Traceable fixed expenses
260000
32.5%
172000
43.0%
88000
22.0%
Territorial segment margin
240000
30.0%
20000
5.0%
220000
55.0%
Common fixed expenses
200000
25.0%
Net operating income
40000
5.0%
b
Northern Territory
Paks
Tibs
Sales
400000
100.0%
125000
100.0%
275000
100.0%
Variable expenses
208000
52.0%
37500
30.0%
170500
62.0%
Contribution margin
192000
48.0%
87500
70.0%
104500
38.0%
Traceable fixed expenses
135500
33.9%
75000
60.0%
60500
22.0%
Product line segment margin
56500
14.1%
12500
10.0%
44000
16.0%
Common fixed expenses
36500
9.1%
Sales territory segment margin
20000
5.0%
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