Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Severo S . A of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement in terms of the Brazilian

Severo S.A of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement in terms of the Brazilian currency, the real, R) for last month is given below
Sales
variable expenses
Contribution margin
Total Company
R3,825,000
Cloth
Leather 1,575,000
2,250,000
1,010,
879,754695,250
1,915,250
Traceable fixed expenses
Advertising
182,000
150
342,000
Selling and administrative
482.000
221,000
Depreciation
Total traceable fixed expenses Divisimal segment margin
$22,210
730,000583,000
310,000
112,258
Common Fixed expenses
395,000
eferences
Operating income
227,250
Top management can't understand why the Leather Divisaon has such a low segment margin when its sales are only 30% less than sales in the Cloth Division: As one step in isolating the problem, management has directed that the Leather Division be further segmented into product lines. The following information is available on the product lines in the Leather Division
Leather Division Product Lines
Sarments Shors
1550.000
Sales
Traceable fixed Advertising
Selling and administrative
Depreciation
Variable expenses as a percentage of sales
34,000
Sex
Analysis shows that R109,000 of the Leather Division's selling and administrative expenses are common to the product lines
Required
1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Clinical Audit In Physiotherapy From Theory Into Practice

Authors: Sue Barnard MSc MCSP, Gayle Hartigan

1st Edition

075063779X, 978-0750637794

More Books

Students also viewed these Accounting questions

Question

What is the environment we are trying to create?

Answered: 1 week ago

Question

How can we visually describe our goals?

Answered: 1 week ago