Shannon Company segments its income statement into its North and South Divisions

Question

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 $990,000, 36%, and $19,800, respectively. The North Division's contribution margin and contribution margin ratio are $132,000 and 40%, respectively. The South Division's segment margin is $151,800. The company has $227,700 of common fixed expenses that cannot be traced to either division. Required Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales. (Round your percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3)) Divisions Total Company North South Amount Amount Amount

Explanation / Answer

Total North South Amount % Amount % Amount % Sales 990000 100.0% 330000 100.0% 660000 100.0% Variable expenses 633600 64.0% 198000 60.0% 435600 66.0% Contribution margin 356400 36.0% 132000 40.0% 224400 34.0% Traceable fixed expenses 108900 11.0% 36300 11.0% 72600 11.0% Territorial segment margin 247500 25.0% 95700 29.0% 151800 23.0% Common fixed expenses 227700 23.0% Net operating income 19800 2.0%

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