Check my work 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 Pacitic 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 Danielle 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 compiled the following information from these meetings Product Lines Furniture Sports Appliances Total Production and sale in units 230,000 195.000 130,000 455,000 Average selling price per unit $10.00 $20.00 5 23.00 werage variable manifacturing cost per unit Average variable selling expense per unit 2.00 2.50 2.00 Fixed manufacturing ovechend excluding depreciation 507.000 Depreciation of plant and equipment 364.000 Administrative and selling expense 1.240,000 6.00 9.50 16.00 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 for per geographical area) to the total number of units produced 3. There was inte 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 staff 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 watatu Balestart Furniture 5127,000 United States 67,000 149.000 Canada 107.000 Appliances 17,000 257.000 Sports Aas 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. 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 staff 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 Start Sales Start $127,000 $ 67,000 Sporta 147,000 Canada 107,000 Appliances 87,000 Asia 257,000 Turniture United States 4. The division managers were able to provide reliable sales percentages for their product lines by geographical area. Percentage of Unit Sales United states Canada Asia Turniture 301 100 600 Sports 300 401 Appliances 201 200 601 308 Murphy prepared the following product-line Income statement based on the data presented above. PACIFIC I THOUSTRIES Segmented Income tatant by Product Lines For the heal Ye Ended April 30. 300 Product Lines Purniture Spot Appliances Unallocated Sales in units 120.000 195,000 130,000 Sales 017300,000 $3,900,000 52,990.000 Variable manufacturing and selling costs 1.040,000 21,340,000 2,200.000 Contribution margin 32607000 10.000 550.000 Fixed coats Yine manufacturing overhead . 92.102 202409 207.40 Total $8,190,000 5.720.000 270.000 3507.000 87,000 257,000 Asia Appliances 2 4. The division managers were able to provide reliable sales percentages for their product lines by geographical area, Turniture Sports Appliances Percentage of Unit Sales United States Canada Asia 301 101 600 301 301 400 201 601 Book 201 Print Murphy prepared the following product-line income statement based on the data presented above, Unallocated Total PACIFIC RIR INOSTRIES Segmented Income Statement by Product Lines for the Fiscal Year Ended April 30, 20x0 Product Lines Furniture Sporta Appliances Sales in its 130,000 195,000 130,000 Salon $1.300.000 $3,900.000 52,990,000 Variable manufacturing and selling costs 1,040,000 2.300.000 2,340.000 Contribution margin $ 260,000 51/560,000 650/000 Fixed costo Fixed manufacturing overhead $ 92,182 $ 207,409 $207, 409 Depreciation 104,000 156,000 106,000 Mitive and selling expenses 127,000 147,000 2000 Total fixed costs 202 $10,000 S320X20 Operating income (10) $ 16,102) $1.049,591 98,190,000 5220.000 32,670,000 $ 07000 270.000 94079,000) $50,000 364,000 120.000 52111, 009 359,000 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 to the nearest dollar amount) Answer is not complete. PACIFIC RIM INDUSTRIES Segmented Income Statement by Geographic Areas For the Fiscal Year Ended April 30,20x0 Geographic Areas United Canada Asia States Unallocated Total Sales in units Furniture 19.000 26,100 21,000 22,400 17,000 23,400 57,000 71.900 0 45, 100 43,400 40,400 128,900 $ 0 0 0 Sports Appliances Total unit sales Revenue Furniture Sports Appliances Total revenue Variable costs Fumitur Sports Appliances Total variable costs Contribution margin Fixed costo $ 0 IS 0 $ 0 $ 0 S 0 $ 0 0 0 0 0 0 S 0 0 S $ $ $ 5 0 0 $ For the Fiscal Year Ended April 30,20x0 Geographic Areas United Canada Asia States Unallocated Total 19,000 26,100 21,000 22,400 17,000 23,400 57,000 71,900 0 45,100 43,400 40,400 128,900 $ 0 0 0 $ 0 S 0 $ 0 $ 0 Sales in units Furniture Sports Appliances Total unit sales 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 foxed costs Onnitino income in is 0 OD 0 $ $ 0 0 $ $ $ oo 0 $ $ 0 $ 0 S 0 0 0 0 $ 0 $ s $ 0 $ 0 s 0 0 0 S 0 IS 0