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Amazon.com, Inc. needs to prepare a segmented income statement for its three product lines: Electronics, Books, and Clothing. The following information is provided: Item Electronics

Amazon.com, Inc. needs to prepare a segmented income statement for its three product lines: Electronics, Books, and Clothing. The following information is provided:

ItemElectronics ($)Books ($)Clothing ($)
Sales500,000300,000200,000
Variable Expenses200,000150,000100,000
Fixed Expenses100,00070,00050,000

Required:

  1. Prepare a segmented income statement for each product line.
  2. Calculate the contribution margin for each segment.
  3. Determine the segment margin for each product line.
  4. Analyze the profitability of each segment and provide recommendations.

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