Answered step by step
Verified Expert Solution
Question
1 Approved Answer
show calculating. G H K L M A B E F Segment Reporting & CVP (18 marks) The Snow Shoes Division of True North Corporation
show calculating.
G H K L M A B E F Segment Reporting & CVP (18 marks) The Snow Shoes Division of True North Corporation produces and markets two snow shoes for use in the snow: Extreme and Premium. The following data were gathered on activities for February 2022: Extreme Premium Sales in units 2,015 9,015 Selling price per unit $ 51.15 $ 21.15 Variable production costs per unit $ 20.00 $ 5.00 Traceable fixed production costs $ 12,000 $ 33,000 Variable selling expenses per unit $ 2.00 $ 1.00 1 Traceable fixed selling expenses $ 2,000 $ 3,000 2 Allocated division administrative expenses $ 40,000 $ 72,000 B Required: 5 1. Prepare a properly formatted segmented income statement for last month, showing both "amount" and "percentages" (where applicable) for the division as a whole and for each product. Display the percentages to the nearest 1 decimal place. enter your answers in the not True North Corporation highlighted cells using proper cell Segmented Income Statement referencing. NOT ALL CELLS NECESSARILY NEED TO BE USED For the month ended February 28, 2022 Total Extreme Premium 1 $ % $ % $ 2 Sales Variable production costs 1 Variable selling costs 5 Contribution margin 5 Traceable fixed production costs Traceable fixed selling costs B Product line segment margin 7 3 7 A E G H 29 30 B 28 Product line segment margin Common expenses Operating income (loss) 31 32 33 2. Calculate the breakeven points in sales dollars for each of the product lines. i.e. breakeven for each product line would be where their respective 34 segment margins equal zero. 35 Extreme Premium 36 Breakeven sales dollars 37 38 3. The sales manager wants to run a special promotional campaign on one of the product lines next month. A marketing study indicates the cost of 39 such a campaign and the corresponding potential increase in sales of the product line as follows: 40 Extreme Premium Projected increase in sales $ 22,000 $ 20,000 The promotional campaign is estimated to cost $ 10,000 41 42 43 44 Show your calculations to determine which product line should be chosen 45 46 47 48 49 Increase (decrease) in segment margin 50 51 Which product line do you recommend they focus the campaign on? 52 53 54 55Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started