Problem: GrandGlaze Co. is divided into three segments and is interested in preparing a segmented income statement in order to better understand the operating performance of each segment. Fixed expenses in each division currently include an allocation of general corporate expenses equal to 20% of the division's sales.
|
|
Division 1
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Division 2
|
Division 3
|
|
Sales
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$160,000
|
$100,000
|
$140,000
|
|
Variable expenses
|
104,000
|
60,000
|
76,000
|
|
Contribution margin
|
$ 56,000
|
$ 40,000
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$ 64,000
|
|
Fixed expenses
|
40,000
|
44,000
|
36,000
|
|
Net income (loss)
|
$ 16,000
|
$ (4,000)
|
$ 28,000
|
(a.) Complete the following segmented income statement for GrandGlaze Co.
Total
Company Division 1 Division 2 Division 3
Sales
Variable expenses
Contribution margin
Direct fixed expenses
Segment margin
Common fixed expenses
Net income (loss)