Problem 3 Pants Inc. produces high-end pants and shorts in a single factory. The following information was provided for the upcoming year. Pants Sales $700,000 Variable cost of goods sold Direct fixed overhead 580,000 20,000 Shorts $520,000 400,000 60,000 A sales commission of 5% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $25,000 for the pants line and $40,000 for the shorts line. Common fixed overhead for the factory is estimated to be $10,000. Common selling and administrative expense was estimated to be $25,000. Prepare a segmented income statement for next year using variable costing. 1. What is the Pants division total contribution margin? 2. What is the Shorts division total contribution margin? 3. What is the Pants division segment margin? 4. What is the Shorts division segment margin? 5. What is the total company operating income?