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Pool Accessories, Inc., has two divisionsFurniture and Supplies. Assume for both divisions that the tax rate is 30 percent, and the cost of capital is
Pool Accessories, Inc., has two divisionsFurniture and Supplies. Assume for both divisions that the tax rate is 30 percent, and the cost of capital is 8%. The following segmented financial information is for the most recent fiscal year ended December 31.
Furniture Division | Supplies Division | |
Sales | $3,000,000 | $1,000,000 |
Cost of goods sold | 1,600,000 | 430,000 |
Allocated overhead | 375,000 | 125,000 |
Selling and administrative expenses | 250,000 | 200,000 |
Average net operating assets | $8,500,000 | 2,100,000 |
- Create a segmented income statement for Pool Accessories, Inc. Include the profit margin ratio for each division at the bottom of the segmented income statement. (10.3)
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