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Jake's Sporting Goods is a retailer of sporting equipment. Last year, Jake's Sporting Goods' sales revenues totalled $9,000,000. Total expenses were $2,325,000. Of this amount,
Jake's Sporting Goods is a retailer of sporting equipment. Last year, Jake's Sporting Goods' sales revenues totalled $9,000,000. Total expenses were $2,325,000. Of this amount, approximately $1,650,000 were variable, while the remainder were fixed. Since Jake's Sporting Goods offers thousands of different products, its managers prefer to calculate the break-even point in terms of sales dollars rather than units. Assume that Jake's Sporting Goods gathers information on the sales of its products based on two departments: Winter Sports and Summer Sports. Winter Sports revenues are $5,000,000 of the total $9,000,000, and the department has an average contribution margin of 75%, while Summer Sports brings in the remaining revenues and has a contribution margin of 90%. Of the fixed costs, $260,000 can be directly traced to Winter Sports and $350,000 can be traced to Summer Sports. Prepare a segmented contribution margin income statement for Jake's Sporting Goods. Prepare a segmented contribution margin income statement for Jake's Sporting Goods. Jake's Sporting Goods Segmented Contribution Margin Income Statement For the Year Ended December 31 Summer Winter Sports 5000000 Total Sports 4000000 Revenues 9000000 1650000 Variable expenses Contribution margin Traceable fixed expenses Segment margin Common costs Net income
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