Question
Problem 3 (20 points) Middleton Associates has two divisions: A and B. During the year just ended, Division O had a segment margin of $9,000
Problem 3 (20 points)
Middleton Associates has two divisions: A and B. During the year just ended, Division O had a segment margin of $9,000 and variable costs equal to 70% of sales. Traceable fixed costs for Division E were $19,000. Hatch Company as a whole had a contribution margin of 40%, a segment margin of $25,000, Common costs of $10,000 and sales of $200,000. Given this data, prepare segmented income statements showing the Total as well as amounts for Division A and B.
Complete the following table. Use the next page to show your calculations for partial credits.
*Tip: Company Segment CM = Division A Segment CM + Division B Segment CM
|
| Total (Company) | Total (Company Percentage | Division A | Division A Percentage | Division B | Division B Percentage |
| Sales | $200000 |
| $150000 | ? | $50000 | ? |
| Variable Cost | $120000 | ? | $105000 | 70% | $15000 | ? |
| Contribution Margin | $80000 | 40% | $45000 | ? | $35000 | ? |
| Traceable Fixed Cost | $55000 |
| $36000 |
| 19,000 |
|
| Segment Contribution Margin | $25,000 |
| $9,000 |
| $16000 |
|
| Less: Common Cost
| 10,000 |
|
|
|
|
|
| Operating Income | $15000 |
|
|
|
|
|
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