Vulcan Company\'s contribution format income stacemant for June is gvan belo For
ID: 2573156 • Letter: V
Question
Vulcan Company's contribution format income stacemant for June is gvan belo For the Month Ended June 30 950,000 Net oparatng Management is disappoinoed with the company's parformance and is wondering what can be done to improve profts. By axamining cales and cost records, you have datarmired the folowing: The oo ar y s d ded nto two saa r tonee rthern and outham. The Northern T mto y ecorded $400 00 n sal s an S 88 000 n vana e e penses du ng June; tha remaning sales and vanable expenses were r oorded in he Southam Tormo y Food par ses o $188,000 and $110 000 are traccabla to the Northern and Southarn Territories, respectively. The rest of the foxad axpansas are common to the two territorias the enclus e dst to for product Paks and Tibs. Sales f Paks and Tb;"ta d $20000 and S200,0 0, es c ey the Nor em e tory du ng June. Vanable experses are 3 % o the sel ng p ce for paks and 64% fo s ostre ords show that S02 000 of the Nort Temitory's foxed expenses are traceable to Paks and $50,0CO bo Tibs, with the remainder common to the two products Required: 1s. Frepare contribution format segmented income ststements for the total company broken down between sales territories. (Do not round your intermediate percentage answers and round your final percentage answers to 1 decimal placeie..1234 should be entered as 12.3 Total Company Nertngm Soutnern and round your final pere Northern TerntoryExplanation / Answer
Solution:
Part 1 ---
Contribution Format Segmented Income Statement
Sales Territory
Total Company
Northern
Southern
Amount
%
Amount
%
Amount
%
Sales
$950,000
100.00
$400,000
100.00
$550,000
100.00
Variable expenses
$408,000
42.95
$188,000
47.00
$220,000
40.00
Contribution Margin
$542,000
57.05
$212,000
53.00
$330,000
60.00
Traceable fixed expenses
$298,000
31.37
$188,000
47.00
$110,000
20.00
Segment Margin /(loss)
$244,000
25.68
$24,000
6.00
$220,000
40.00
Common Fixed Expenses
(Non traceable Fixed Expenses) (490,000 - 298,000)
$192,000
Net operating income (loss)
$52,000
Part 2 ---
Contribution Format Segmented Income Statement
Product Line
Northern Territory
Paks
Tibs
Amount
%
Amount
%
Amount
%
Sales
$400,000
100.00
$200,000
100.00
$200,000
100.00
Variable expenses
$188,000
47.00
$60,000
15.00
$128,000
23.27
Contribution Margin
$212,000
53.00
$140,000
35.00
$72,000
13.09
Traceable fixed expenses
$142,000
47.00
$92,000
23.00
$50,000
9.09
Segment Margin /(loss)
$70,000
6.00
$48,000
12.00
$22,000
4.00
Common Fixed Expenses
(Non traceable Fixed Expenses) (188,000 - 142,000)
$46,000
Net operating income (loss)
$24,000
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Contribution Format Segmented Income Statement
Sales Territory
Total Company
Northern
Southern
Amount
%
Amount
%
Amount
%
Sales
$950,000
100.00
$400,000
100.00
$550,000
100.00
Variable expenses
$408,000
42.95
$188,000
47.00
$220,000
40.00
Contribution Margin
$542,000
57.05
$212,000
53.00
$330,000
60.00
Traceable fixed expenses
$298,000
31.37
$188,000
47.00
$110,000
20.00
Segment Margin /(loss)
$244,000
25.68
$24,000
6.00
$220,000
40.00
Common Fixed Expenses
(Non traceable Fixed Expenses) (490,000 - 298,000)
$192,000
Net operating income (loss)
$52,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.