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Meagan Thompson is the vice president of finance fo Jackson Brothers' Publishing Company. She has just received the income statements segmented by division for the

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Meagan Thompson is the vice president of finance fo Jackson Brothers' Publishing Company. She has just received the income statements segmented by division for the two major divisions of her company for the month of May. The results concern her because one of the company's key divisions appears to be losing money. Financial information for May is shown in the table below. Jackson Brothers' Publishing Company Income Statement For the month ended May XX Textbook Professional Company Division Division 410,000 610,00 200,000 Sales Less: Variable expenses 205,000 237,000 Manufacturing 32,000 Selling and administrative 4,400 24,600 29,000 266,000 Tota 6,400 229,600 Contribution margin 163,600 180,400 44,000 Less: Direct fixed expenses 20,00 200,000 220,000 Net income Megan along with others in top management are very concerned about the Professional Division. It is two thirds of the company's sales but appears to be losing money. They are requesting additional analysis. A breakdown of the information for the Professional Division is given below. Note that the allocated common fixed expenses are arbitrarily allocated by management to each segment based on total annual depreciation of their facilities. Professional Division Accounting Executive Management Books Books Books Segment Segment Segment 130,000 Sales 140,000 140,000 Variable manufacturing expenses as a percentage of sales 60% 40% 50% Other variable expenses as a percentage of sales 6% 69% 69% Direct fixed expenses 50,000 73,500 50,00 ocated common fixed expenses 8,850 4,400 13,250

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