Writing Inc. has two product lines. The September income statements of each product line and the company are as follows:

Pens and pencils are sold in two territories, Vermont and Washington, as follows:

The direct fixed expenses of pens, $13,500, and of pencils, $10,500, cannot be identified with either territory. The company’s accountants were unable to allocate any of the common fixed expenses to the various segments.
Required Prepare income statements segmented by territory for September, including a column for the entire firm.

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WRITING INC. Product Line and Company Income Statements For Month of September Pens Sales.... Less variable expenses Total $45,000 $45,000 $90,000 Pencils (18,000) (18,000) (36,000) Contribution margin. 27,000 Less direct fixed expenses.. 27,000 (13,500) (10,500) (24,000) 54,000 Product margin.. $13,500 $16,500 30,000 Less common fixed expenses (9,000) Net income.. $21,000