Segment Reporting and Analysis Minnesota Bread Company bakes three products: don
ID: 2559422 • Letter: S
Question
Segment Reporting and Analysis Minnesota Bread Company bakes three products: donuts, bread, and pasteries. It sells them in the cities of Minneapolis and St. Paul. For March, its first month of operation, the following income statement was prepared: MINNESOTA BREAD COMPANY Territory and Company Income Statements For Month of March Minneapolis St. Paul Total Sales.... $2,100 $500 $2,600 (1.500) (300) (1,800) Selling and administrative expenses Net income. . 600 (400) S 200 200 (225) s (25) 800 (625) S 175 . . .. Sales and selected variable expense data are as follows: Products Donuts Bread Pastries 4% 50% $100 $850$900 $350 $200 $150 $150 .$200 Variable baking expenses as a percentage of sales........ Variable selling expenses as a percentage of sales 50% 496 60% 696 4% City of St. Paul, sales .. .. for March, of which $160 was a direct expense of the ixed administrative The fixed selling expenses were $385 Minneapolis market and $225 was a direct expense of the St. Paul market. F expenses were $130, which manageme approach Required a. Prepare a segment income statement showing the territory margin for each sales te nt has decided not to allocate when using the contribution rritory for March. Include a column for the entire firm. pare segment income statements showing the product margin for each product. Include a column for the entire firm. If the pastries line is dropped and fixed baking expenses do not change, what is the product margin for donuts and bread? What other type of segmentation might be useful to Minnesota Bread. Explain. c. d.Explanation / Answer
(C)
Donut Bread Pasteries Sales 1050 1050 500 Variable Banking Expenses 525 525 300 Variable Selling Expenses 42 42 30 Contribution 483 483 170 Fixed Expenses 200 140 100 Net income 283 343 70