E10-19A Prepare a segment margin performance report (Learning Objective 2) Drizz

Question

E10-19A Prepare a segment margin performance report (Learning Objective 2) Drizzdale Industries has gathered the following information about the actual sales rev- enues and expenses for its pharmaceuticals segment for the most recent year Sales $ 866,320 $143,325 $ 162,162 $ 96,300 $ 17,280 $ 14,140 Variable Operating Expenses... Direct Fixed Manufacturing Overhead.. Direct Fixed Operating Expenses.. Budgeted data for the same time period for the pharmaceutical segment are as follows (all data are in millions) Budgeted average selling price per unit...... Variable Cost of Goods Sold per unit.. Variable Operating Expenses per unit........... Direct Fixed Manufacturing Overhead (in total) Direct Fixed Operating Expenses (in total Common Fixed Expenses Allocated to the 9,100 $85 $15 $ 18 $90,000 $ 16,000 $14,000 Prepare a segment margin performance report for the pharmaceutical segment. In this report, be sure to include lines for the contribution margin, the segment margin, and operating income. Calculate a variance and a variance percentage for each line in the report. Round to the nearest hundredth for the variance percentages (for example, if your answer is 16.2384%, round it to 16.24%)

Explanation / Answer

DRIZZDALE INDUSTRIES Segment Margin Performance Report Actual   Budgeted Variance Variance % Sales    866,320.00    773,500.00    92,820.00 (F) 12.00% Variable Expenses: Cost of Goods Sold    143,325.00    136,500.00      6,825.00 (U) 5.00% Operating Expenses    162,162.00    163,800.00      1,638.00 (F) 1.00% Contribution Margin    560,833.00    473,200.00    84,357.00 (F) 17.83% Direct Fixed Expenses: Fixed Manufacturing Overhead      96,300.00      90,000.00      6,300.00 (U) 7.00% Fixed Operating Expense      17,280.00      16,000.00      1,280.00 (U) 8.00% Segment Margin    447,253.00    367,200.00    76,777.00 (F) 20.91% Common Fixed Expense Allocated      14,140.00      14,000.00          140.00 (U) 1.00% Operating Income.    433,113.00    353,200.00    76,637.00 (F) 21.70%

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