Segmented Income Statement

Kraft Bowlen owns two sports franchises$-$the Bladers $($a hockey team$)$ and the Ballers $($a basketball

team$).$ The following information was provided for the coming year.

A sales commission of $5\%$ of sales revenue is paid for each of the two sports franchises. Direct fixed

selling and administrative expense was estimated to be $$4,000,000$ for the Bladers franchise and

$$10,000,000$ for the Ballers franchise.

Common fixed overhead associated with owning the franchises was estimated to be $$18,000,000$;

common selling and administrative expense was estimated to be $$8,000,000.$

Required:

Prepare a segmented income statement for Kraft Bowlen for the coming year, using variable costing.

Note: Enter all amounts as positive numbers except operating loss, if applicable.

Kraft Bowlen

Segmented Income Statement

For the Coming Year

Less variable expenses:

Variable cost of goods sold $$

Variable selling expense

Contribution margin

Less direct fixed expenses:

Direct fixed overhead

Direct selling and administrative $$

Segment margin

Less common fixed expenses:

Common fixed overhead

Common selling and administrative

Operating income

$