Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P24-31. Multiple Segment Reports $1.045,000 Worldwide Communications, Incorporated, sells telecommunication products throughout the world in three sales territories: Europe, Asia, and the Americas. For

image text in transcribed

P24-31. Multiple Segment Reports $1.045,000 Worldwide Communications, Incorporated, sells telecommunication products throughout the world in three sales territories: Europe, Asia, and the Americas. For July, all of administrative expense is traceable to the territories, except $200,000, which is common to all units and cannot be traced or al- located to the sales territories. The percentage of product line sales made in each of the sales territories and the assignment of traceable fixed expenses follow: Sales Territory Europe Asia The Americas Company Handset sales..... 40% 35% 25% 100% Switchboard sales 35% 35% 30% 100% Automated switches sales 10% 15% 75% 100% Fixed administrative expense.. $350,000 $275,000 $220,000 $845,000 Fixed selling expense.... $155,000 $175,000 $550,000 $880,000 obi The manufacturing takes place in one large facility with three distinct manufacturing operations. Selected product-line cost data follow. Handset Switchboard Automated Switches Company $ 15 $ 850 60,000 175,000 $ 1,950 275,000 $ 585,000* Variable costs.. Depreciation and supervision. Other mfg. overhead (common).. Fixed selling expense (common).. Fixed administrative expense (common) *Includes common costs of $75,000 The unit sales and selling prices for each product follow. Handset. Switchboard Automated Required 650,000 1,045,000 880,000 Unit Sales Selling Price 6,500 $ 25 1,500 1,900 2,500 3,500 a. Prepare an income statement for July segmented by product line. Include a column for the entire firm. b. Prepare an income statement for July segmented by sales territory. Include a column for the entire firm. c. Prepare an income statement for July by product line for The Americas sales territory. Include a column for the territory as a whole. Products are manufactured in a single facility. Although de- preciation and supervision are allocated by product line, those costs are not allocated by territory. d. Discuss the value of multilevel segment reporting as a managerial tool. Compare and contrast the benefits of the reports generated in parts a, b, and c.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting A User Perspective

Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry

6th Canadian Edition

470676604, 978-0470676608

More Books

Students also viewed these Accounting questions