Royal Lawncare Company produces and sells two packaged products—Weedban and Gree
ID: 2342210 • Letter: R
Question
Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:
Product
Common fixed expenses in the company total $97,000 annually. Last year the company produced and sold 41,000 units of Weedban and 18,500 units of Greengrow.
Required:
Prepare a contribution format income statement segmented by product lines.
Product
Weedban Greengrow Selling price per unit $ 12.00 $ 31.00 Variable expenses per unit $ 3.00 $ 12.00 Traceable fixed expenses per year $ 134,000 $ 45,000Explanation / Answer
492000
(41000*12)
573500
(18500*31)
123000
(41000*3)
222000
(18500*12)
Total weedban Greengrow Sales 1065500492000
(41000*12)
573500
(18500*31)
Variable expenses 345000123000
(41000*3)
222000
(18500*12)
Contribution margin 720500 369000 351500 Traceable fixed expenses 179000 134000 45000 Product line segment margin 541500 Common fixed expenses not Traceable to product 97000 Net operating income 444500