3. Preparation of responsibility income statements Hal-Marts, Inc., has two sale

Question

3. Preparation of responsibility income statements
Hal-Marts, Inc., has two sales departments: equipment and clothing. During February, these two departments reported the following operating results:

In addition, fixed costs common to both departments amounted to $54,400.

Complete the following responsibility income statement for Hal-Marts, Inc. Follow the contribution margin approach, and show percentages as well as dollar amounts. Conclude your income statement with the company’s income from operations.

HAL-MARTS, INC
Income Statement by Product Lines
For the Month Ended February 28, 20__

Segments

HAL-Marts, Inc.

Equipment

Clothing

Dollars

%

Dollars

%

Dollars

%

Sales

$490,000

$250,000

Contribution margin

HAL-MARTS, INC
Income Statement by Product Lines
For the Month Ended February 28, 20__

Segments

HAL-Marts, Inc.

Equipment

Clothing

Dollars

%

Dollars

%

Dollars

%

Sales

$490,000

$250,000

Contribution margin

Explanation / Answer

Answer

Excel Working

HAL Marts Equipment Clothing Amount % Amount % Amount % Sales 7,40,000 100.00% 4,90,000 100.00% 2,50,000 100.00% Variable Expenses 4,43,500 59.93% 3,18,500 65.00% 1,25,000 50.00% Contribution margin 2,96,500 40.07% 1,71,500 35.00% 1,25,000 50.00% Treaceble fixed expenses      56,000 7.57%      29,200 5.96%      26,800 10.72% territorial segment margin 2,40,500 32.50% 1,42,300 29.04%      98,200 39.28% common fixed expenses      54,400 7.35% Net operating income / (Loss) 1,86,100 25.15%

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