Dantrell Palmer has just been appointed manager of Kirchner Glass Products Division. He has two years to make the division profitable. If the division is still showing a loss after two years, it will be eliminated, and Dantrell will be reassigned as an assistant divisional manager in another division. The divisional income statement for the most recent year is as follows: Sales $4,590,000 Less: Variable expenses 3,953,450 Contribution margin $636,550 Less: Direct fixed expenses 675,000 Divisional margin $(38,450) 200,000 Less: Common fixed expenses (allocated) Divisional profit (loss) $(238,450) Upon arriving at the division, Dantrell requested the following data on the division's three products: Product A Product B Product C Sales (units) Unit selling price 12,000 $150.00 $100.00 14,500 $120.00 $83.00 10,000 $70.00 $107 Unit variable cost Direct fixed costs $100,000 $425,000 $250,000 He also gathered data on a proposed new product (Product D). If this product is added, it would displace one of the current products; the quantity that could be produced and sold would equal the quantity sold of the product it displaces, although demand limits the maximum quantity that could be sold to 20,000 units. Because of specialized production equipment, it is not possible for the new product to displace part of the production of a second product. The information on Product Dis as follows: Unit selling price Unit variable cost Direct fixed costs $80 30 240,000 Required: Required: 1. Prepare segmented income statements for Products A, B, and C. Enter your answers in thousands rounded to the nearest cent. Kirchner Glass Products Division Segmented Income Statement Products Sales $ 12,000 X $ 14,500 X $ Less: Variable expenses 1,800,000 Contribution margin Less: Direct fixed expenses Product margin Less: Common fixed expenses Operating income (loss) Feedback Check My Work Do not forget common fixed costs are added at the Division level. Which product has the highest product margin? A Feedback Check My Work 2. Assume that Dantrell decides to produce products A and D for the coming year. Prepare the segmented income statements (in thousands) for these two products. Enter your answers in thousands. Kirchner Glass Products Division Segmented Income Statement Products (in thousands) Total Sales Less: Variable expenses Contribution margin $ Less: Direct fixed expenses Product margin Less! Common fixed expenses Operating income Feedback Check My Work Don't forget common fixed costs are added at the Division level. By how much will profits improve given the combination assumed above? Enter your answer in dollars. $1,171,50 X Feedback Check My Work