Reference no: EM132515708

Gorman Nurseries Inc. grows poinsettias and fruit trees in a green house/nursery operation. The following information was provided for the coming year.

Poinsettias                                    Fruit              Trees

Sales                                   $ 970,100             $ 3,099,800

Variable cost of goods sold      460,500                 1,630,600

Direct fixed overhead               160,400                  200,000

• A sales commission of 3% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $145,900 for the poinsettia line and $87,400 for the fruit tree line.
• Common fixed overhead for the nursery operation was estimated to be $799,800; common selling and administrative expense was estimated to be $450,700.

Required:

Question 1: Segmented income statement for Gorman Nurseries for the coming year, using variable costing.