Segment reporting by division LO Sorority Products Company has two divisions, Gamma and Sigma. For the

* month ended March 3 1, Gamma had sales and variable costs of $500,000 and

$225,000, respectively, and Sigma had sales and variable costs of $800,000 and

$475,000, respectively. Gamma had direct fixed production and administrative expenses of $60,000 and $35,000, respectively, and Sigma had direct fixed production and administrative expenses of $80,000 and $45,000, respectively.

Fixed costs that were common to both divisions and couldn't be allocated to the divisions in any meaningful way were selling, $33,000, and administration,

$27,000.

Prepare a segmented income statement by division for the month of March.

E 1-8 Computing break-even LO Idaho Company has a sales price per unit for its only product at $ 1 3. The variable cost per unit is $5. In year 2002, the company sold 80,000 units, which was 5,000 units above the break-even point.

Compute the following:

1. Total fixed expenses. (Hint: First compute the contribution margin per unit.)

2. Total variable expense at the break-even volume.