Problem
Segmented Income Statement
Knitline Inc. produces high-end sweaters and jackets in a single factory. The following information was provided for the coming year.
Sweaters Jackets
|
Sweaters
|
Jackets
|
|
Sales
|
$294,000
|
$630,000
|
|
Variable cost of goods sold
|
145,000
|
196,000
|
|
Direct fixed overhead
|
25,000
|
47,000
|
A sales commission of 5% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $28,000 for the sweater line and $70,000 for the jacket line.
Common fixed overhead for the factory was estimated to be $45,000. Common selling and administrative expense was estimated to be $15,000.
Required:
Prepare a segmented income statement for Knitline for the coming year, using variable costing.