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The most recent monthly contribution format income statement for Reston Company is given below Reston Company Income Statement For the Month Ended May 31 800,000
The most recent monthly contribution format income statement for Reston Company is given below Reston Company Income Statement For the Month Ended May 31 800,000 100.0% 300,000 37.5 Variable expenses Contribution margin Fixed expenses 500,000 62.5 470,000 588 Net operating income $30,000 37% Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following a. The company is divided into two sales territories-Central and Eastern. The Central Territory recorded $400,000 in sales and $216,000 in variable expenses during May. The remaining sales and variable expenses were recorded in the Eastem Territory. Fixed expenses of $152,000 and S96,000 are traceable to the Central and Eastern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Awis and Pows. Sales of Awls and Pows totaled $100,000 and S300,000, respectively, in the Central Territory during May. Variable expenses are 15% or the selling price for Avis and 67% for Pows. Cost records show that S51.000 of the central Territory's fixed expenses are traceable to Awls and $72,000 to Pows, with the remainder common to the two products Required 1a. Prepare contribution tomat segmented income statements for the total company broken down between sales territories. (Input all amounts as positive values except losses which should be indicated by a minus sign. Round your percentage answers to 1 decimal place, omit the "S" and "%" signs in your response.) Total Company Central Amount Amount Amount 100.00 $ 900000 300000 $ 400000 216000 84.9 35.1 Sales Variable expenses Contribution margin Traceable fixed expenses 500000 Common fixed expenses Net operating income (loss) 1b. Prepare contribution format segmented income statements for the Central Territory broken down by product line. (Input all amounts as positive values except losses which should be indicated by a minus sign. Round your percentage answers to 1 decimal place. Omit the "$" and "96" signs in your response.) Product Line Central Territory Awls Pows Click to Click to Click to select (Click to select) (Click to select) (Click to select) (Click to select)
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