Vulcan Companyâs contribution format income statement for June is given below:
Vulcan Company
Income Statement
For the Month Ended June 30 Sales $ 900,000 Variable expenses 400,000 Contribution margin 500,000 Fixed expenses 475,000 Net operating income $ 25,000
Management is disappointed with the companyâs 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 territoriesâNorthern and Southern. The Northern Territory recorded $400,000 in sales and $160,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $176,000 and $140,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories.
b. The company is the exclusive distributor for two productsâPaks and Tibs. Sales of Paks and Tibs totaled $140,000 and $260,000, respectively, in the Northern territory during June. Variable expenses are 27% of the selling price for Paks and 47% for Tibs. Cost records show that $67,200 of the Northern Territoryâs fixed expenses are traceable to Paks and $57,200 to Tibs, with the remainder common to the two products.
1.) Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round the percentage answers to one decimal place (i.e .1234 should be entered as 12.3))
Sales Territory Total Company Northern Southern Amount % Amount % Amount % Sales Variable expenses Contribution margin 0 0.0 0 0.0 0 0.0 Traceable fixed expenses Territorial segment margin 0 0.0 $0 0.0 $0 0.0 Common fixed expenses Net operating income $0 0.0
2.)
Prepare contribution format segmented income statements for the Northern Territory broken down by product line. (Round the percentage answers to one decimal place (i.e .1234 should be entered as 12.3))
Product Line Northern Territory Paks Tibs Amount % Amount % Amount % Sales Variable expenses Contribution margin 0 0.0 0 0.0 0 0.0 Traceable fixed expenses Product line segment margin 0 0.0 $0 0.0 $0 0.0 Common fixed expenses Sales territory segment margin $0 0.0
| Vulcan Companyâs contribution format income statement for June is given below: |
| Vulcan Company Income Statement For the Month Ended June 30 | ||||
| Sales | $ | 900,000 | ||
| Variable expenses | 400,000 | |||
| Contribution margin | 500,000 | |||
| Fixed expenses | 475,000 | |||
| Net operating income | $ | 25,000 | ||
| Management is disappointed with the companyâs 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 territoriesâNorthern and Southern. The Northern Territory recorded $400,000 in sales and $160,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $176,000 and $140,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| b. | The company is the exclusive distributor for two productsâPaks and Tibs. Sales of Paks and Tibs totaled $140,000 and $260,000, respectively, in the Northern territory during June. Variable expenses are 27% of the selling price for Paks and 47% for Tibs. Cost records show that $67,200 of the Northern Territoryâs fixed expenses are traceable to Paks and $57,200 to Tibs, with the remainder common to the two products. 1.) Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round the percentage answers to one decimal place (i.e .1234 should be entered as 12.3))
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2.)
| Prepare contribution format segmented income statements for the Northern Territory broken down by product line. (Round the percentage answers to one decimal place (i.e .1234 should be entered as 12.3))
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Related questions
| Vulcan Companyâs contribution format income statement for June is given below: |
| Vulcan Company Income Statement For the Month Ended June 30 | ||||
| Sales | $ | 900,000 | ||
| Variable expenses | 400,000 | |||
| Contribution margin | 500,000 | |||
| Fixed expenses | 475,000 | |||
| Net operating income | $ | 25,000 | ||
| Management is disappointed with the companyâs 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 territoriesâNorthern and Southern. The Northern Territory recorded $400,000 in sales and $160,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $176,000 and $140,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. |
| b. | The company is the exclusive distributor for two productsâPaks and Tibs. Sales of Paks and Tibs totaled $140,000 and $260,000, respectively, in the Northern territory during June. Variable expenses are 27% of the selling price for Paks and 47% for Tibs. Cost records show that $67,200 of the Northern Territoryâs fixed expenses are traceable to Paks and $57,200 to Tibs, with the remainder common to the two products. |
| Required: |
| 1a. | Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round the percentage answers to one decimal place (i.e .1234 should be entered as 12.3)) |
| 1b. | Prepare contribution format segmented income statements for the Northern Territory broken down by product line. (Round the percentage answers to one decimal place (i.e .1234 should be entered as 12.3)) |
| Vulcan Companyâs contributionformat income statement for June is given below: |
| Vulcan Company Income Statement For the Month Ended June 30 | ||||
| Sales | $ | 900,000 | ||
| Variableexpenses | 408,000 | |||
| Contributionmargin | 492,000 | |||
| Fixed expenses | 480,000 | |||
| Net operatingincome | $ | 12,000 | ||
Management is disappointed with the companyâs performance and iswondering what can be done to improve profits. By examining salesand cost records, you have determined the following: |
| a. | The company is divided into two sales territoriesâNorthern andSouthern. The Northern Territory recorded $400,000 in sales and$208,000 in variable expenses during June; the remaining sales andvariable expenses were recorded in the Southern Territory. Fixedexpenses of $180,000 and $145,000 are traceable to the Northern andSouthern Territories, respectively. The rest of the fixed expensesare common to the two territories. |
| b. | The company is the exclusive distributor for two productsâPaksand Tibs. Sales of Paks and Tibs totaled $160,000 and $240,000,respectively, in the Northern territory during June. Variableexpenses are 28% of the selling price for Paks and 68% for Tibs.Cost records show that $78,400 of the Northern Territoryâs fixedexpenses are traceable to Paks and $55,200 to Tibs, with theremainder common to the two products. |
| Required: |
| 1a. | Prepare contribution format segmented income statements for thetotal company broken down between sales territories. (Roundthe percentage answers to one decimal place (i.e .1234 should beentered as 12.3)) |
Vulcan Companyâs contribution format income statement for June is given below:
| Vulcan Company | |||
| Income Statement | |||
| For the Month Ended June 30 | |||
| Sales | $ | 800,000 | |
| Variable expenses | 300,000 | ||
| Contribution margin | 500,000 | ||
| Fixed expenses | 450,000 | ||
| Net operating income | $ | 50,000 | |
Management is disappointed with the companyâs performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following:
The company is divided into two sales territoriesâNorthern and Southern. The Northern Territory recorded $300,000 in sales and $150,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $123,000 and $100,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories.
The company is the exclusive distributor for two productsâPaks and Tibs. Sales of Paks and Tibs totaled $105,000 and $195,000, respectively, in the Northern territory during June. Variable expenses are 24% of the selling price for Paks and 64% for Tibs. Cost records show that $52,500 of the Northern Territoryâs fixed expenses are traceable to Paks and $40,950 to Tibs, with the remainder common to the two products.
Required:
1a. Prepare contribution format segmented income statements for the total company broken down between sales territories. (Do not round your intermediate percentage answers and round your final percentage answers to 1 decimal place (i.e. .1234 should be entered as 12.3).)
1b. Prepare contribution format segmented income statements for the Northern Territory broken down by product line. (Do not round your intermediate percentage answers and round your final percentage answers to 1 decimal place (i.e. .1234 should be entered as 12.3).)
