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questions uploaded backwards, so sorry 3. There was little agreement on the allocation of administrative and selling expenses, so Murphy decided to allocate only those

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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 Furniture Sales Staff 61,000 101,000 251,000 $121,000 United States Sports Appliances 141,000 Canada 81,000 Asia 4. The division managers were able to provide reliable sales percentages for their product lines by geographical area Percentage of Unit Sales United States 30% 30% 40% Canada 20% 30% 40% Asia 50% 40% 20% Furniture Sports Appliances Murphy prepared the following product-line income statement based on the data presented above 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 Appliances 132,500 $1,325, 000 $4,770,000 $2,650,000 2,252,500 397,500 Furniture 132,500 Unallocated Sales in units Sales Variable manufacturing and selling costs Contribution margin Fixed costs: 190,800 $8,745,000 5.697,500 1,060,000,385,000 $2,385,000 39113 265,000 $3,047,500 498,000 364,640 1,260,000 Fixed manufacturing overhead Depreciation Administrative and selling expenses Total fixed cost $ 92,651 208,465 196,884 106,000 81,000 $ 319,651 502,105 383,884 $ (54, 651 $1,882,895 13,616 106,000 121.000 152,640 141.000 917.000 $ 917.000 S 13,616$2,122,640 (917,000 924,860 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.) PACIFIC RIM INDUSTRIES Segmented Income Statement by Geographic Areas For the Fiscal Year Ended April 30, 20x0 Geographic Areas United States Asia Total Canada Unallocated Sales in units Furniture Sports Appliances Total unit sales Revenue Furniture Sports Appliances Total revenue Variable costs Furniture Sports Appliances Total variable costs 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 455, 800 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, 132,500 $ 10.00 6.00 2.00 190,800 132,500 25.00 20.00 15.50 1.50 10.00 2.50 excluding depreciation Depreciation of plant and equipment Administrative and selling expense $ 498,000 364,640 1,260,000 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 Murphv decided to allocate only those

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