Pacific Rim Industries is a diversified company whose products are marketed both domestically and internationally. The companys major product lines are furniture, sports equipment, and household appliances. At a recent meeting of Pacific Rims board of directors, there was a lengthy discussion on ways to improve overall corporate profitability. The members of the board decided that they required additional financial information about individual corporate operations in order to target areas for improvement.

Danielle Murphy, the controller, has been asked to provide additional data that would assist the board in its investigation. Murphy believes that income statements, prepared along both product lines and geographic areas, would provide the directors with the required insight into corporate operations. Murphy had several discussions with the division managers for each product line and compiled the following information from these meetings.

	Product Lines
	Furniture			Sports			Appliances			Total
Production and sales in units		126,250			181,800			126,250			434,300
Average selling price per unit	$	10.00		$	22.00		$	20.00
Average variable manufacturing cost per unit		6.00			10.50			15.70
Average variable selling expense per unit		2.00			2.00			1.70
Fixed manufacturing overhead, excluding depreciation										$	526,000
Depreciation of plant and equipment											347,440
Administrative and selling expense											1,210,000

1. The division managers concluded that Murphy should allocate fixed manufacturing overhead to both product lines and geographic areas on the basis of the ratio of the variable costs expended to total variable costs.

2. Each of the division managers agreed that a reasonable basis for the allocation of depreciation on plant and equipment would be the ratio of units produced per product line (or per geographical area) to the total number of units produced.

3. There was little agreement on the allocation of administrative and selling expenses, so Murphy decided to allocate only those expenses that were traceable directly to a segment. For example, manufacturing staff salaries would be allocated to product lines, and sales staff salaries would be allocated to geographic areas. Murphy used the following data for this allocation.

Manufacturing Staff				Sales Staff
Furniture	$	123,000		United States	$	63,000
Sports		143,000		Canada		103,000
Appliances		83,000		Asia		253,000

4. The division managers were able to provide reliable sales percentages for their product lines by geographical area.

	Percentage of Unit Sales
	United States		Canada		Asia
Furniture	30	%	20	%	50	%
Sports	30	%	30	%	40	%
Appliances	10	%	10	%	80	%

Murphy prepared the following product-line income statement based on the data presented above.

PACIFIC RIM INDUSTRIES
Segmented Income Statement by Product Lines
For the Fiscal Year Ended April 30, 20x0
	Product Lines
	Furniture				Sports				Appliances				Unallocated				Total
Sales in units		126,250				181,800				126,250
Sales	$	1,262,500			$	3,999,600			$	2,525,000							$	7,787,100
Variable manufacturing and selling costs		1,010,000				2,272,500				2,196,750								5,479,250
Contribution margin	$	252,500			$	1,727,100			$	328,250							$	2,307,850
Fixed costs:
Fixed manufacturing overhead	$	96,959			$	218,157			$	210,885			$				$	526,000
Depreciation		101,000				145,440				101,000								347,440
Administrative and selling expenses		123,000				143,000				83,000				861,000				1,210,000
Total fixed costs	$	320,959			$	506,597			$	394,885			$	861,000			$	2,083,440
Operating income (loss)	$	(68,459	)		$	1,220,503			$	-66,635			$	(861,000	)		$	224,410

Required:

1. Prepare a segmented income statement for Pacific Rim Industries based on the companys geographical areas. The statement should show the operating income for each segment. (Do not round your intermediate calculations and round your final answers to the nearest dollar amount.)