Kiedas Adorning Company has two divisions and the following information available:

a. Net sales were $130,000. $90,000 was attributed to the Jewel Division.

b. Variable costs were $80,000. 40% was attributed to the Cosmetics Division.

c. Total separable fixed costs controllable by division managers were $30,000, of which $20,000 applied to the Jewel Division.

d. Total separable fixed costs, not controllable by division managers were $10,000 in the Jewel Division and $4,000 in the Cosmetics Division.

e. Unallocated costs were $7,000.

Required:

a) Prepare a contribution approach income statement for the company as a whole and each division. (15 Marks)

b) Which division manager should receive a bonus? Why? (10 Marks)