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The income statement for a division of a large company follows: $K Sales$8,000 Variable costs $3,000 Contribution$5,000 Fixed costs $4,000 Profit$1,000 The fixed costs of
The income statement for a division of a large company follows:
$K
Sales$8,000
Variable costs$3,000
Contribution$5,000
Fixed costs$4,000
Profit$1,000
The fixed costs of $4,000 include an amount of $1,000 in the form of an allocation of costs incurred by the Corporate Centre.
Required:
Produce an income statement that better communicates the contribution of the division to corporate profit.
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