Answer:
North South Total
Sales 300,000(D) 200,000 (E) 500,000
Variable -150,000(G) -120,000(H) -270,000(B)
Contribution 150,000 80,000 (F) 230,000(A)
Traceable Fixed -80,000(J) -50,000(I) -130,000 (C)
Business Fixed Cost -90, 000
Income 70,000(K) 30,000 10, 000
Explanation:
On the order of how to calculate eahc value I will be explaining how to build the income statement
bold are givens.
(A) overal sales 500,000 and contribution margin ratio of 46%
sales x CMR = contribution margin
500,000 x 46% = 230,000
(B) sales - variable cost = contribution margin
500,000 - variable cost = 230,000
500,000 - 246,000 = variable cost = 270,000
(C) we need a net operating income of 10,000
contribution - fixed cost = operating income
contribution - tracable fixed csot - business fixed cost = operating income
230,000 - tracable cost - 90,000 = 10,000
230,000 - 90,000 - 10,000 = tracable cost = 130,000
(D) and (E)
North CMR equal to .50 and CM equal to 150,000
sales x CMR = CM
sales x 0.5 = 150,000 = 150,000/0.50 = 300,000
total sales = north sales + south sales
total sales are 500,000 and north sales are 300,000
500,000 - 300,000 = 200,000 south sales
(F) total CM = north CM + South CM
total contribution 230,000 north contribution 150,000
230,000 - 150,000 = 80,000 contribution
(G) (H)
sales - variable cost = cm
sales - cm = variable cost
north 300,000 - 150,000 = 150,000
south 200,000 - 80,000 = 120,000
(I) (J)
we know that segment margin is 30,000 for south so
CM - fixed cost for south = 30,000
80,000 - south fixed = 30,000
south = 50,000
Then we calculate tracable fixed cost for north
total tracable cost 130,000
south = 50,000
130,000 - 50,000 = 80,000 fixed for north
(K) last, we know that CM for noth is 150,000 and it has 80,000 fixed csot
their segment income is 150,000 - 80,000 = 70,000
