PLEASE HELP THANKS SO MUCH Crane Equipment sells equipment to sports enthusiasts

Question

PLEASE HELP THANKS SO MUCH

Crane Equipment sells equipment to sports enthusiasts. Doug Crane, the company's president, just received the following income statement reporting the results of the past year Baseball Soccer Basketball Total Sales revenue Variable cost of goods sold Fixed cost of goods sold Gross profit Varlable operating expenses Fixed operating expenses Common fixed costs Operating income $1,370,000 3,930,000 $2,579,000 7,879,000 926,000 2,554,500 2,081,600 5,562,100 203,700 179,300 19,300 1,171,800 318,100 1,809,200 124,700 507,700 185,200 85,800 65,500 628,800 257,900 1,071,900 257,000 311,200 91,700 79,500 140,000 105,700 ($17,200) $311,300 ($125,000) $169,100 Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseball and basketball gear to concentrate solely on soccer gear Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. (If the amount is negative then enter with a negative sign preceding the number, e.g.-5,125 or parenthesis, e.g. (5,125).) Baseball Soccer Basketball Total

Explanation / Answer

Answer 1. Segment Margin Income Statement Baseball Soccer Basketball Total Sales Revenue    1,370,000.00    3,930,000.00    2,579,000.00    7,879,000.00 Variable Costs: Cost of Goods Sold        926,000.00    2,554,500.00    2,081,600.00    5,562,100.00 Operating Expenses        185,200.00        628,800.00        257,900.00    1,071,900.00 Total Variable Costs    1,111,200.00    3,183,300.00    2,339,500.00    6,634,000.00 Contribution Margin        258,800.00        746,700.00        239,500.00    1,245,000.00 Traceable Fixed Costs Cost of Goods Sold        124,700.00        203,700.00        179,300.00        507,700.00 Operating Expenses          85,800.00          91,700.00          79,500.00        257,000.00 Total Traceable Costs        210,500.00        295,400.00        258,800.00        764,700.00 Segment Margin          48,300.00        451,300.00        (19,300.00)        480,300.00 Common Fixed Expenses        311,200.00 Operating Income        169,100.00 Answer 2. Doug should not consider closing the baseball division. Doug should consider closing the basketball division. Answer 3. Changing allocation methods does not change the decision.

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