Question
The Z Corporation produces and markets two types of electronic calculators: Model 11 and Model 12. The following data were gathered on activities last month:
The Z Corporation produces and markets two types of electronic calculators: Model 11 and Model 12. The following data were gathered on activities last month:
| Model 11 | Model 12 |
Sales in units | 5,000 | 3,000 |
Selling price per unit | $50 | $100 |
Variable production costs per unit | $10 | $26 |
Traceable fixed production costs | $100,000 | $150,000 |
Variable selling expenses per unit | $5 | $6 |
Traceable fixed selling expenses | $5,000 | $7,500 |
Allocated division administrative expenses | $50,000 | $60,000 |
Required: (7 marks) a. Prepare a segmented income statement in the contribution format for last month, showing both "Amount" and "Percent" columns for the company as a whole and for each model. (5 marks) b. Why might it be very difficult to calculate separate break-even sales for each model? (2 marks)
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