The following data pertain to the operating revenues and expenses for California, Inc. for 20XX.

Los AngelesSan FranciscoTotal

(LA) Segment (SF) Segment

Sales$180,000$360,000$540,000

Variable expenses96,000 240,000 336,000

Direct fixed expenses24,000 30,000 54,000

Indirect fixed expenses72,000

Assets (investment) used to generate operating income for the two segments are shown below.

Los Angeles San Francisco

Segment Segment

Assets directly used by and identified with the segment $180,000 $360,000

1. Create a segmented income statement in good format showing the contribution margin of each segment, the contribution to indirect expenses of each segment, and the total income of California, Inc.
2. Determine the return on investment for evaluating (1) the earning power of the entire company and (2) the performance of each segment.
3. Comment on the results of part (b).