Solution-Prepare income statements segmented by territory

Prepare income statements segmented by territory

Assignment Help Accounting Basics

Reference no: EM131736944

Problem - Income Statements Segmented by Territory

Script, Inc., has two product lines. The September income statements of each product line and the company are as follows:

Sales	$25,000	$30,000	$55,000
Less variable expenses	(10,000)	(12,000)	(22,000)
Contribution margin	15,000	18,000	33,000
Less direct fixed expenses	(9,000)	(7,000)	(16,000)
Product margin	$6,000	$11,000	$17,000
Less common fixed expenses			(6,000)
Net income			$11,000

Pens and pencils are sold in two territories, Florida and Alabama, as follows:

Pen sales	$12,000	$13,000
Pencil sales	8,000	22,000
Total sales	$20,000	$35,000

The preceding common fixed expenses are traceable to each territory as follows:

Florida fixed expenses	$2,000
Alabama fixed expenses	3,000
Home office administration fixed expenses	1,000
Total common fixed expenses	$6,000

The direct fixed expenses of pens, $9,000, and of pencils, $7,000, cannot be identified with either territory. The company's accountants were unable to allocate any of the common fixed expenses to the various segments.

(a) Prepare income statements segmented by territory for September, including a column for the entire firm. Do not use negative signs with your answers.

Reference no: EM131736944

Questions Cloud

Discuss excellence in healthcare service : Discuss the role of information systems in achieving excellence in healthcare service. In doing so, consider the advantages and disadvantages of advanced

What literary tools they have used to convey that message : What literary tools they have used to convey that message. Summary or description of the plot of their short story.

What is the total contribution margin for this selection : How many of each kind of component should be produced and sold to maximize the company's contribution margin assuming any units produced can be sold

How many units of y brand budgeted for production in june : Short Company produces two products: X Brand and Y Brand. How many units of Y Brand are budgeted for production in June? Brand X in May

Prepare income statements segmented by territory : Prepare income statements segmented by territory for September, including a column for the entire firm. Do not use negative signs with your answers

Identify and explain the accounting practices : Identify and explain the accounting practices California Sutter Health used in defining and solving its collection problems

Define purpose of applying the npv investment rule : What two points in time are useful to define for the purpose of applying the NPV investment rule to development projects and for quantifying the development.

Calculate the retained earnings balance at february : On February 1, 2016, the balance of the retained earnings account of Blue Power Corporation was $315,000. Calculate the retained earnings balance at February

Identify a positive or negative hydrolysis of starch agar : Identify a positive or negative hydrolysis of starch agar, if iodine has been added to the plate. Identify the enzyme that hydrolyses starch.

User Account

All Pages

Prepare income statements segmented by territory

Reference no: EM131736944

Reference no: EM131736944

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT