ork, Ch 6 Shannon Company segments its Income statement into Its North and South
ID: 2539176 • Letter: O
Question
ork, Ch 6 Shannon Company segments its Income statement into Its North and South Divisions. The company's overall sales, contribution margin ratio and net operating income are $960,000, 34%, and $19,200, respectively. The North Division's contribution margin and margin ratio are $121600 and 38%, respectively. The South Division's segment margin is $140800. The company has $211,200 of common fixed expenses that cannot be traced to either division. Required: Prepare an income the company as a whole and for each segment, show each item on the segmented income statements as your percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3) statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for a percent of sales. (Round Divisions NorthExplanation / Answer
Total Company North Division South Division
Amount % Amount % Amount %
Sales 960,000.00 100.00% 320,000.00 100.00% 640,000.00 100.00%
Variable Costs 633,600.00 66.00% 198,400.00 62.00% 435,200.00 68.00%
Contribution Margin 326,400.00 34.00% 121,600.00 38.00% 204,800.00 32.00%
Traceable Fixed Cost 96,000.00 10.00% 32,000.00 10.00% 64,000.00 10.00%
Territorial Segment Margin 230,400.00 24.00% 89,600.00 28.00% 140,800.00 22.00%
Common Fixed Expenses 211,200.00 22.00%
Net Operating Income 19,200.00 2.00%
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