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Consider the following table and prepare a segmented income statement on paper. Use your income statement to answer the following questions: What is the contribution
Consider the following table and prepare a segmented income statement on paper. Use your income statement to answer the following questions: What is the contribution margin for Product B? What is the segment margin for Product B? What is the total segment margin? What is net income?
Product A | Product B | |
Units sold | 2500 | 3700 |
Selling price per unit | $36 | $18 |
Variable costs per unit | $6 | $7 |
Direct fixed costs per product line | $3750 | $2035 |
Allocated common fixed costs per product line | $9000 | $6600 |
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