Question
need the answers of 2,3,and 4 Barbecue Industries produces two products, Barbecue sauce and Barbecue seasoning. Information relating to the products for October is as
need the answers of 2,3,and 4 Barbecue Industries produces two products, Barbecue sauce and Barbecue seasoning. Information relating to the products for October is as follows: Barbecue Sauce Barbecue Seasoning Units produced and sold 19,000 16,000 Selling price per unit $20 $4 Variable expenses per unit $7 $3 Direct fixed expenses by product Barbecue Sauce $50,000 Barbecue Seasoning $40,000 Common Fixed Expenses $20,000 Required: 1. Design a segmented income statement showing the 2 product costs and a company total column. The segmented income statement should be developed to assist management in the decision making of questions listed in 2-4 below. Use only cell references for #1 to develop your numeric part of the segmented income statement. Barbecue Industries Segmented Income Statement For the Month Ended October 31, 20XX Barbecue Sauce Barbecue Seasoning Barbecue Industries Total Unit produced and sold $19,000 $16,000 $35,000 Selling price per unit $20 $4 Total Sales $380,000 $64,000 $444,000 Less Variable Expenses $133,000 $48,000 $181,000 Contribution Margin for Barbecue Sauce $197,000 $247,000 $16,000 $263,000 Contribution Margin for Barbecue Seasoing $24,000 Less Direct Fixed Expenses $50,000 $40,000 $90,000 Contribution Margin for Barbecue Industries $173,000 Less Common Fixed Expenses $20,000 Net Income $153,000 2. What would be the dollar effect on the company's profit if Barbecue Sauce is dropped? Provide the overall change in income and the impact positive or negative on company income. 3. What would be the dollar effect on the company's profit if Barbecue Seasoning is dropped? Provide the overall change in income and the impact positive or negative on company income. 4. Would you recommend that Barbecue Industries drop Barbecue Sauce or Barbecue Seasoning? Why or why not?
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