PROBLEM 8–1 Selected financial data for Petersen Corporation’s revenue and income (contribution) are reproduced below:

Line of Business Year 1 Year 2 Year 3 Year 4 Revenue Manufactured and engineered products Engineered equipment........................................ $ 30,341 $ 29,807 $ 32,702 $ 43,870 Other equipment ................................................ 5,906 5,996 6,824 7,424 Parts, supplies, and services.............................. 29,801 29,878 33,623 44,223 Total manufactured & engineered products........ 66,048 65,681 73,149 95,517 Engineering and erecting services...................... — — 12,261 36,758 Total environmental systems group .................... 66,048 65,681 85,410 132,275 Frye Copysystems ................................................... 25,597 28,099 31,214 39,270 Sinclair & Valentine................................................. — 53,763 57,288 60,973 A. L. Garber ............................................................. 16,615 15,223 20,445 24,808 Total graphics group........................................... 42,212 97,085 108,947 125,051 Total consolidated revenue ................................. $108,260 $162,766 $194,357 $257,326 Line of Business Year 1 Year 2 Year 3 Year 4 Income Manufactured and engineered products.................. $ 3,785 $ 3,943 $ 9,209 $ 10,762 Engineering and erecting services .......................... — — 1,224 3,189 International operations.......................................... 2,265 2,269 2,030 2,323 Total environmental systems group .................... 6,050 6,212 12,463 16,274 Frye Copysystems .................................................... 1,459 2,011 2,799 3,597 Sinclair & Valentine................................................. — 3,723 4,628 5,142 A. L. Garber ............................................................. (295) 926 1,304 1,457 Total graphics group........................................... 1,164 6,660 8,731 10,196 Total divisional income............................................ 7,214 12,872 21,194 26,470 Unallocated expenses and taxes ............................. (5,047) (8,146) (13,179) (16,449)
Total income from continuing operations ................ $ 2,167 $ 4,726 $ 8,015 $10,021 Required:

a. Use common-size statements to analyze every division’s (1) contribution to total consolidated revenue, (2) contribution to total divisional income, and (3) ratio of income to revenue.

b. Interpret and comment on the evidence revealed from your computations in a.