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eyPLUS During the current c o Secure I https//eduger.wileyplus.com/edugen/studentimanfruni ? Davis, Managerial Accounting, 2e MANAGERIAL ACCT (ACCT 2102) Read, Study & Practice ent> Open Assignment TIMER Start Time: 08:33 PM/ Remaining: 138 min. Gradebook ORION CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION NEXT Problem 10-25 For the second year in a row, the Collectibles division was showing a negative segment margin, and Trent thought it was time to close the divisi on to increase the company's operating income. The income statement that he examined follows. Promotions Collectib ibles Division Division Total Revenue Less variable expenses Contribution margin Less traceable fixed expenses Segment margin Common fixed costs Net operating income $5,300,000 $2,860,000 $8,160,000 3,650,000 1,645,000 5,295,000 1,650,0001,215,000 2,865,000 943.000 1.275,0002,218,000 $707,000 $(60,000) 647,000 555,000 When Trent broke the news, Taylor Tatum, manager of the Collectibles division, was upset. Taylor thought that Trent could be making a snap judgment, and suggested that he look at the division's detailed operating results. The Collectibles di ision is composed o two groups, Sports Memorabiia and Co s and Stamps. Sports Mamorablia accounts or 0%o the desin sales and c t ibution margin; Coins and Stamps accounts for the other 40%. Sports Memorabilia's traceable fixed costs are $810,000, coins and stamps, S245.000. Prepare a segment margin income statement for the Collectibles division that shows the segment maroin of each group. (If the amount is negative then enter with a negative sign preceding the number e.g. -5,125 or parenthesis. e.g. (5,125) and Round answers to 0 decimal places, e.o. 5, 125.) Sports Memorabilia Coins and Stamps Total Collectibles Division

Explanation / Answer

Answers

Sports Memorabilia

Coins & Stamps

Total Collectibles Divisions

Sales Revenue

$ 17,16,000.00 [60%]

$ 11,44,000.00 [40%]

$ 28,60,000.00

Less: Variable Cost

$ 9,87,000.00

$ 6,58,000.00

$ 16,45,000.00

Contribution margin

$ 7,29,000.00

$ 4,86,000.00

$ 12,15,000.00

Traceable fixed expenses

$ 8,10,000.00

$ 2,45,000.00

$ 10,55,000.00

Segment margin

$ (81,000.00)

$ 2,41,000.00

$ 1,60,000.00

Common Fixed Expenses

$ 2,20,000.00 [1275000 – 1055000]

Operating Income

$ (60,000.00)