Jane Baldwin, Anderson Flooring's accounting intern, has prepared the following income statement for the month of June. In preparing the income statement, Jane was unsure what to do with $250,000 in corporate fixed expenses that cannot be traced to a particular division. Since these costs were incurred to run the business as a whole, and she believed that each division benefited equally, she just allocated half to each division.

Required
a. How do you think Jane should have handled the $250,000 in corporate fixed expenses?
b. Prepare a segment margin income statement that highlights each division's contribution to corporateprofits.

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Residential Commercial $3,125,000 2,520,000 605,000 620,000 Total Sales revenue Variable expenses Contribution margin Fixed expenses Operating income $1,750,000 1035,000 715,000 645,000 $ 70,000 $4,875,000 3,555,000 1,320,000 1,265,000 5,000) 55,000