Pratt Corporation has two major business segments-Apparel andAccessories. Data concerning those segments for October appearbelow:

Common fixed expenses totaled $153,000 and were allocated asfollows: $73,000 to the Apparel business segment and $80,000 to theAccessories business segment.

Required:

Prepare a segmented income statement in the contribution format forthe company. Omit percentages; show only dollar amounts.

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Collen VonLv2

7 Mar 2019

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Data for December concerning Ash Corporation's two majorbusiness segments-Fibers and Feedstocks-appear below.

Sales revenues, Fibers	$950,000
Sales revenues, Feedstocks	$900,000
Variable expenses, Fibers	$525,000
Variable expenses, Feedstocks	$424,000
Traceable fixed expenses, Fibers	$148,000
Traceable fixed expenses, Feedstocks	$156,000

Common fixed expenses totaled $292,000 and were allocated asfollows: $155,000 to the Fibers business segment and $137,000 tothe Feedstocks business segment.

Required:

Prepare a segmented income statement in the contribution format forthe company. Omit percentages; show only dollar amounts. (Points :15)

tanclam688

Data for January for Bondi Corporation and its two major business segments, North and South, appear below:


Sales revenues, North	$	548,000
Variable expenses, North	$	318,000
Traceable fixed expenses, North	$	65,600
Sales revenues, South	$	423,500
Variable expenses, South	$	241,600
Traceable fixed expenses, South	$	54,800

In addition, common fixed expenses totaled $148,600 and were allocated as follows: $77,200 to the North business segment and $71,400 to the South business segment.

A properly constructed segmented income statement in a contribution format would show that the segment margin of the North business segment is:

sapphireotter98

EXERCISE 6-16 Working with a Segmented Income Statement; Break-Even Analysis [L06-4, L06-5] Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classi- fies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given below: Sales ........ Variable expenses .......... Contribution margin ........................... Traceable fixed expenses ....................... Office segment margin .............................. Common fixed expenses not traceable to offices ..... Net operating income ...... Total Company $450,000 100% 225,000 50% 225,000 50% 126,000 28% 99,000 22% 63,000 $ 36,000 8% Office Chicago Minneapolis $150,000 100% $300,000 100% 45,000 30% 180,000 60% 105,000 70% 120,000 40% 78,000 52% 48,000 $ 27,000 18% $ 72,000 24% -16% 1496 Required: 1. Compute the company wide break-even point in dollar sales. Also, compute the break-even point for the Chicago office and for the Minneapolis office. Is the company wide break- even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points? Why? By how much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost behavior patterns. 3. Refer to the original data. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company using the above format. Show both amounts and percentages. b. Observe from the income statement you have prepared that the contribution margin ratio for Chicago has remained unchanged at 70% (the same as in the above data) but that the segment margin ratio has changed. How do you explain the change in the segment mar- gin ratio?

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