Exercise 6-4 Basic Segmented Income Statement [LO6-4] Royal Lawncare Company pro
ID: 2401846 • Letter: E
Question
Exercise 6-4 Basic Segmented Income Statement [LO6-4]
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 $108,000 annually. Last year the company produced and sold 41,500 units of Weedban and 16,000 units of Greengrow.
Required:
Prepare a contribution format income statement segmented by product lines.
Product
Weedban Greengrow Selling price per unit $ 10.00 $ 32.00 Variable expenses per unit $ 2.60 $ 10.00 Traceable fixed expenses per year $ 131,000 $ 40,000Explanation / Answer
Total Weedban Greengrow Sales 927000 415000 512000 Variable expenses 267900 107900 160000 Contribution margin 659100 307100 352000 Traceable fixed expenses 171000 131000 40000 Product line segment margin 488100 176100 312000 Common fixed expenses nottraceable to products 108000 Net operating income 380100