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Allentown, Inc., is a company with two segments, X and Y. follow Its revenues and expenses for 2014 Problem 25-4 Prepare a schedule showing contribut
Allentown, Inc., is a company with two segments, X and Y. follow Its revenues and expenses for 2014 Problem 25-4 Prepare a schedule showing contribut Segment Segment margin and contribution to Total indirect expense using contribut margin format prepare segm income stater $96,000 $144,000 $240,000 Net sales Direct expenses: 45,000 99,000 144,000 7,200 20,880 Cost of goods sold Selling Administrative: 13,680 (LO. 3) Uncollectible accounts Insurance Interest 3,000 2,400 480 1,800 1,200 240 4,800 3,600 720 Indirect expenses (all fixed) Selling Administrative 18,000 25,200 Allthe direct expenses are variable except insurance and interest, which are fixed. Prepare a schedule showing the contribution margin, the contribution to indirect expenses of each segment, and net income for the company as a whole. Do not allocate indirect expenses to the segments. Assume that indirect selling expenses are to be allocated on the basis of net sales and that indirect administrative expenses are to be allocated on the basis of direct administrative expenses. Prepare a statement (starting with the contribution to indirect a. b. expenses) that shows the net income of each segment. c Comment on the appropriateness of the income amounts shown in parts (a) and (b) for determining the income contribution of the segments
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