# ADM 2341 Lecture Notes - Earnings Before Interest And Taxes, Fixed Cost, Income Statement

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10 Jun 2013
School
Department
Course
Professor
Yasemin Piyale-Sheard
Student Number: 6470605
Managerial Accounting ā Assignment 3
1.
Contribution Margin Income Statement
Product A
Product B
Total
Sales
1,600,000
2,800,000
4,400,000
Variable Costs
VM
800,000
1,680,000
2,480,000
Commissions
240,000
420,000
660,000
Total Variable Cost
1,040,000
2,100,000
3,140,000
CM
560,000
700,000
1,260,000
Traceable FC
150,000
200,000
350,000
Other (traceable costs)
180,000
180,000
360,000
Total Traceable Fixed Costs
330,000
380,000
710,000
Segment Margin
230,000
320,000
550,000
Common Fixed Cost
-
-
400,000
Operating Income
150,000
CALCULATIONS:
*Common Fixed Cost = (350,000 - 180,000) + (410,000 - 180,000)
= \$400,000
*Contribution Margin (CM) = Sales - TVC
= 4,400,000 - 3,140,000
= \$1,260,000
* Segment Margin (SM) = CM - Total Traceable Fixed Costs
= 1,260,000 - 710,000
= \$550,000
* Operating Income = Segment Margin - Common Fixed Cost
= 550,000 - 400,000
= \$150,000
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