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I need help with the whole problem please! thanks and i attached the requirements Chapter 6 SegmentReport (20 points Henry Vernon an industrial supply store
I need help with the whole problem please! thanks and i attached the requirements
Chapter 6 SegmentReport (20 points Henry Vernon an industrial supply store chain, has two divisions. The company's contribution format income statement segmented by divisions for last year is given below Division Total Company Plastics Glass Amount Amount Amount Sales 1,500,000 100.0% 900,000 100.0% 600,000 100.0% Less variable expenses 700,000 46.7% 400,000 44.4% 00.000 50.0%% Contribution margin 800,000 53.3% 00.000 55.6% 300,000 50.0% Less traceable fixed expenses Advertising 300,000 20.0% 180,000 20.0% 120,000 20.0% Depreciation 140,000 9.3% 92,000 10.2% 48,000 8.0% Administration 220,000 14.7% 118,000 13.1% 102,000 17.0% Total 660,000 44.0% 390,000 43.3% 270,000 45.0% Divisional segment margin 140,000 9.3% 110,000 12.2% 30,000 5.0% Less common fixed expenses 100,000 6.7% Net operating income 40,000 2.7% Top management doesn't understand why the Glass Division has such a low segment margin when it sales are only one-third less than sales the Plastic Division. Accordingly, management has directed that the Glass Division be further segmented into product lines. The following information is available on the product lines in the Glass Division: Glass Division ProductLines Specialty Flat Glass Auto Glass Glass Sales 200,000 300,000 $100,000 Traceable fixed expenses: Advertising Depreciation Administration Variable expenses as a percentage of sales 65% 40% 50% Analysis shows that $60,000 of the Glass Division's administration expenses are common to the product linesStep by Step Solution
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