Case 12-53 Segmented Income Statement; International Operations (LO 12-1, 12-5) Pacific Rim Industries is a diversified company whose products are marketed both domestically and Internationally. The company's major product lines are furniture, sports equipment, and household appliances. At a recent meeting of Pacific Rim's board of directors, there was a lengthy discussion on ways to improve overall corporate profitability. The members of the board decided that they required additional financial Information about Individual corporate operations in order to target areas for improvement. Daniele Murphy, the controller, has been asked to provide additional data that would assist the board in its investigation. Murphy believes that income statements, prepared along both product lines and geographic areas, would provide the directors with the required insight into corporate operations. Murphy had several discussions with the division managers for each product line and compled the following information from these meetings Total 405.900 Production and sales in its Average selling price per unit Average variable manufacturing cost per unit Average variable selling experie per unit Fixed manufacturing over head, excluding depreciation Depreciation of plant and equipment Ministrative and selling expense Product Lines Sporta App Ilancon 703,400 201,250 23.00 $ 21.00 9.50 15.55 3.00 1.55 Furniture 141,250 $10.00 5.00 3.00 499,000 308, 720 1,190,000 1. The division managers concluded that Murphy should allocate fixed manufacturing overhead to both product lines and geographic areas on the basis of the ratio of the variable costs expended to total variable costs 2. Each of the division managers agreed that a reasonable basis for the allocation of depreciation on plant and equipment would be the ratio of units produced per product line (or per geographical area) to the total number of units produced Then the listinen annen santhan 2. Each of the division managers agreed that a reasonable basis for the allocation of depreciation on plant and equipment would be the ratio of units produced per product line for per geographical area) to the total number of units produced 3. There was little agreement on the allocation of administrative and selling expenses, so Murphy decided to allocate only those expenses that were traceable directly to a segment. For example, manufacturing stoff salaries would be allocated to product lines, and sales staff salaries would be allocated to geographic areas. Murphy used the following data for this allocation Manufacturing State sales statt Forniture $120,000 United States $ 60,000 Sporta 140,000 Appliances 00,000 Ania 250,000 Canada 100,000 4. The division managers were able to provide reliable soles percentages for their product lines by geographical area. Percentage of Unit Bazen Canada Furniture Sporto Appliance United States 305 30 201 Ania 108 600 30 408 201 608 Murphy prepared the following product line income statement based the data presented above. Murphy prepared the following product-line income statement based on the data presented above. PACIFIC RIM INDUSTRIES Segmented Income statement by Product Lines For the Fiscal Year Ended April 30, 20x0 Product Lines Purniture Sports Appliances Unallocated Total Salon in units 141,250 203,400 141,250 Salon $1412500 34,678,200 32,966,250 $9,056,950 variable manufacturing and selling conta 1,130,000 2,542.500 2,415,375 6,087,075 Contribution margin $ 202,500 $2,135,700 3550,875 $2,969,073 Tixed costo: Fixed manufacturing overhead 92,622 $ 208,399 $ 197,979 $ 499,000 Depreciation 113,000 162, 720 113,000 388, 720 administrative and selling expenses 120,000 140,000 80,000 850,000 1,190,000 Total fixed costs 325,622 3,119 $390, 979 850,000 32,072720 Operating income (10) $ (43,122) $1,624,581 $ 159,896 $(850,000) $ 891,355 Required: 1. Prepare a segmented income statement for Pacific Rim Industries based on the company's geographical areas. The statement should show the operating Income for each segment. (Do not round your intermediate calculations and round your final answers the nearest dollar amount.) PACIFIC RIM INDUSTRIES Segmented Income Statement by Geographic Areas For the Fiscal Year Ended April 30,20x0 Geographic Areas United States Canada Asia Unallocated Total Sales in units 0 0 Furniture Sports Appliances Total unit sales 0 0 0 0 0 Revenue Furniture 0 0 0 0 $ 0 $ 0 $ 0 Sports Appliances Total revenue Variable costs Furniture Sports Appliances Total variable costs Contribution margin 0 0 0 $ 0 $ 0 0 $ $ $ 0 0 S 0 $ 0 0 0 0 0 $ 0 $ 0 $ 0 0 $ 0 0 Revenue Furniture Sports Appliances Total revenue Variable costs Furniture Sports Appliances Total variable costs Contribution margin Fixed costs Manufacturing overhead Depreciation Administrative and selling expenses Total fixed costs Operating income (loss) 0 0 $ $ 0 0 $ 0 $ 0 $ 0 $ $ 0 0 0 0 0 $ 0$ 0 $ 0 + 0 0 $ $ $ 0 $ 0 $ 0 0