Love My Phone is based in Kingswood, Texas. The merchandising company has two divisions: Cell Phones and MP3 Players. The Cell Phone division has two main product lines: Basic and Advanced. The Basic product line includes phones whose primary function is storing contacts and making/receiving calls. The Advanced product line includes multi-application phones that, in addition to the Basic phones usage, contain a variety of applications. Applications include texting, surfing the Internet, interfacing to Outlook, creating documents, taking pictures, and so on. The company uses a shared order processing department. There are $25,000 in fixed order processing costs each month, of which $20,000 are traceable to the two divisions by the number of orders placed. 3,000 orders a month are processed by the MP3 Player division and 7,000 orders a month are processed by the Cell Phone division. 1,000 of the orders processed for the Cell Phone division cannot be traced to either product line. Facts related to the divisions and products for the month ended September 30, 2012, follow:

Requirements
1. Calculate the rate per order for Order Processing. Calculate the traceable fixed costs for each division and for each product in the Cell Phone division.
2. Prepare an income statement for the company using the contribution margin approach. Calculate net income for the company, divisional segment margin for both divisions, and product segment margin for bothproducts.

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Cell Phones Division Basic MP3 Players Division Advanced 4,000 2,000 3,000 Number of orders processed per Sales revenue COGS (variable). Fixed selling expenses. Variable selling expenses month... $75,000 $300,000 $150,000 12,000 9,000 9,000 16,000 25,000 14,000