Henrietta Ltd. produces fine clothing for women. There are two primary divisions within the company: professional wear and formal wear. The following income statements were prepared for the divisions:

The above income statements were prepared by an inexperienced staff accountant. Common fixed expenses of $50,000 were allocated to the two divisions as follows: 30 percent to professional wear and 70 percent to formal wear.

Required
Prepare new segmented income statements for Henrietta Ltd. after removing the common fixedexpenses.

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Sales Variable expenses Contribution margin Fixed expenses Income Professional $1,200,000 955,000 S 245,000 115,000 $ 130,000 Formal $1,750,000 1,360,000 $ 390,000 175,000 $ 215,000