1. (TCO H) Ginger Corporation has two major business segments—Herbs and Spices.

Question

1. (TCO H) Ginger Corporation has two major business segments—Herbs and Spices. Data concerning those segments for June appear below.

Sales revenues, Herbs $475,000
Variable expenses, Herbs $262,500
Traceable fixed expenses, Herbs $78,000
Sales revenues, Spices $450,000
Variable expenses, Spices $225,000
Traceable fixed expenses, Spices $65,000

Common fixed expenses totaled $195,000 and were allocated as follows: $85,000 to the Herbs business segment and $110,000 to the Spices business segment.

Required:

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

Explanation / Answer

Answer:

Ginger Corporation Income Statement Particulars Herbs Spices Total Sales revenue 475000 450000 925000 Variable expenses 262500 225000 487500 Contribution 212500 225000 437500 Less: Fixed costs Traceable 78000 65000 143000 Common 85000 110000 195000 Total fixed costs 163000 175000 338000 Net operating income 49500 50000 99500

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