Writing, Inc., has two product lines. The September income statements of each pr

Question

Writing, Inc., has two product lines. The September income statements of each product line and the company are as follows: Writing, INC. Product Line and Company Income Statements For Month of September Pens Pencils Total Sales $ 45,000 $ 45,000 $ 90,000 Less variable expenses (18,000) (18,000) (36,000) Contribution margin 27,000 27,000 54,000 Less direct fixed expenses (13,500) (10,500) (24,000) Product margin $ 13,500 $ 16,500 30,000 Less common fixed expenses (9,000) Net income $ 21,000 Pens and pencils are sold in two territories, Vermont and Washington, as follows: Vermont Washington Pen sales $ 27,000 $ 18,000 Pencil sales 13,500 31,500 Total sales $ 40,500 $ 49,500 The common fixed expenses are traceable to each territory as follows: Vermont fixed expenses $ 3,000 Washington fixed expenses 4,500 Home office administration fixed expenses 1,500 Total common fixed expenses $ 9,000 The direct fixed expenses of pens, $13,500, and of pencils, $10,500, cannot be identified with either territory. The company's accountants were unable to allocate any of the common fixed expenses to the various segments. Prepare income statements segmented by territory for September, including a column for the entire firm. Do not use negative signs with your answers. Writing, Inc. Territory and Company Income Statements For the Month of September Vermont Washington Company Totals Sales: Pens $Answer 0 $Answer 0 $Answer 0 Pencils Answer 0 Answer 0 Answer 0 Total sales Answer 0 Answer 0 Answer 0 Variable costs: Pens Answer 0 Answer 0 Answer 0 Pencils Answer 0 Answer 0 Answer 0 Total Answer 0 Answer 0 Answer 0 Contribution margin Answer 0 Answer 0 Answer 0 Direct fixed expenses Answer 0 Answer 0 Answer 0 Territory margin $Answer 0 $Answer 0 Answer 0 Common fixed expenses: Pens Answer 0 Pencils Answer 0 Home office Answer 0 Total Answer 0 Net income $Answer 0

Explanation / Answer

Writing, Inc. Territory and Company Income Statements For the Month of September Vermont Washington company Totals Sales Pen 27000 18000 45000 Penciles 13500 31500 45000 Total Sales 40500 49500 90000 Variable Cost Pen 10800 7200 18000 Penciles 5400 12600 18000 Total 16200 19800 36000 Contribution Margin 24300 29700 54000 Direct Fixed Eexpenses 3000 4500 7500 Territory Margin 21300 25200 46500 Common Fixed Expenses Pen 13500 Penciles 10500 Home Office 1500 Total 25500 Net Income 21000

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