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PACIFIC RIM INDUSTRIES Segmented Income Statement by Geographic Areas For the Fiscal Year Ended April 30, 20x0 Geographic Areas Canada United States Asia Unallocated Total

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PACIFIC RIM INDUSTRIES Segmented Income Statement by Geographic Areas For the Fiscal Year Ended April 30, 20x0 Geographic Areas Canada United States Asia Unallocated Total Sales in units Furniture Sports Appliances Total unit sales Revenue Furniture Sports Appliances Total revenue Variable costs Furniture Sports Appliances Total variable costs Contribution margin Fixed costs Manufacturing overhead Depreciation Administrative and selling expenses Total fixed costs Operating income (loss) 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 Sports Total Furniture 232.000 AppliancesUnallocated Sales in units Sales Variable manufacturing and selling costs Contribution margin Fixed costs: 232,000 $4,176, 000 3,306,000 $ 232,000 $2,392,500 870,000 217,500 $1,392,000 $5,002,500 1,160,000 2,610,000 $10,570,500 7,076,000 $3,494,500 Fixed manufacturing overhead Depreciation Administrative and selling expenses Total fixed costs $84,590 190,328 241,082 185,600 142,00082,000 $ 392,190506,328$ 508,682 $(160,190) $1,886,172 $ 361,318 516,000 545,200 1,160,000 $ 2,221,200 $(814,000) 1,273,300 185,600 122,0001421000 174,000 814,000 gr0O $ 814,000 Operating income (loss) Required 1. Prepare a segmented income statement for Pacific Rim Industries based on the company's 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.) 1. The division managers concluded that Murphy should allocate fixed manufacturing overhead to both product lines and geographic 2. Each of the division managers agreed that a reasonable basis for the allocation of depreciation on plant and equipment would be 3. There was little agreement on the allocation of administrative and selling expenses, so Murphy decided to allocate only those areas on the basis of the ratio of the variable costs expended to total variable costs. the ratio of units produced per product line (or per geographical area) to the total number of units produced 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 Furniture Sports Appliances Sales Staff $122,000 142,000 82,000 United States Canada Asia $62,000 102,000 252,000 4. The division managers were able to provide reliable sales percentages for their product lines by geographical area Percentage of Unit Sales Furniture Sports Appliances United States 30% 30% 20% Canada 10% 30% 20% Asia 60% 40% 60% Murphy prepared the following product-line income statement based on the data presented above Pacific Rim Industries is a diversified company whose products are marketed both domestically and internationally. The company's major product lines are furniture, sports equipment, and household appliances. At a recent meeting of Pacific Rim's 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 681,500 Production and sales in units Average selling price per unit Average variable manufacturing cost per unit Average variable selling expense per unit Fixed manufacturing overhead, 232,000 $ 6.00 23.00 18.00 11.50 2.75 232,000 217,500 3.00 2.00 9.60 2.40 excluding depreciation Depreciation of plant and equipment Administrative and selling expensee $ 516,000 545,200 1,160,000 1. The division managers concluded that Murphy should allocate fixed manufacturing overhead to both product lines and geographic 2. Each of the division managers agreed that a reasonable basis for the allocation of depreciation on plant and equipment would be 3. There was little agreement on the allocation of administrative and selling expenses, so Murphy decided to allocate only those areas on the basis of the ratio of the variable costs expended to total variable costs. the ratio of units produced per product line (or per geographical area) to the total number of units produced 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

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