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Segmented Income Statement Gorman Nurseries Inc. grows poinsettias and fruit trees in a green house/nursery operation. The follo

bija089 [108]

Answer:

Poinsettias records a loss of $118,125

Fruit Trees records a profit of $92,325

The company therefore records an overall $25,800 loss

NB: See the workings below see the assumption mad to allocate common expenses since none is given in the question.

Explanation:

Variable costing income statement is a type of income statement that records variable cost separately first to determine the contribution margin and thereafter record the fixed cost which is further split into direct fixed expenses and common expenses.

The segmented income statement for Gorman Nurseries for the coming year can therefore be presented as follows:

Gorman Nurseries Inc.

Segmented Income Statement

For the coming year

Particulars Poinsettias ($) Fruit Trees ($) Total ($)

Sales 970,000 3,100,000 4,070,000

Variable COGS (460,000) (1,630,000) (2,090,000)

Variable selling exp. (w1.) (38,800) (124,000) (162,800)

Contribution margin 471,200 1,346,000 1,817,200

Direct fixed overhead (160,000) (200,000) (360,000)

Direct fixed S $ Admn exp. (146,000) (87,000) (233,000)

Segment margin 165,200 1,059,000 1,224,200

Common fixed overh. (w2a) (176,077) (623,923) (800,000)

Common S $ Admn ex (w2b) (107,248) (342,752) (450,000)

Segment Net Income (loss)  (118,125)   92,325   (25,800) 

Workings:

w1. Variable selling expenses = Sales * Commission percentage

Poinsettias = $970,000 * 4% = $38,8000

Fruit Trees = $3,100,000 * 4% = $124,000

w2. Allocation of common expenses using the following assuptions:

a) Use cost of goods sold (COGS) to allocate Common fixed overhead:

Poinsettias = (460,000 / 2,090,000) * $800,000 = $176,077

Fruit Trees = (1,630,000 / 2,090,000) * $800,000 = $623,923

b) Use common selling and administrative expense using Sales:

Poinsettias = (970,000 / 4,070,000) * $450,000 = $176,077

Fruit Trees = (3,100,000 / 4,070,000) * $450,000 = $623,923

4 0

3 years ago

Which of the following should you include in e-mails?

saul85 [17]

I would say letter “E” but the government already knows all of our personal information, so whats the point... probably being watched threw your computer/phone camera rn

7 0

3 years ago

J Crane, Ltd. is a local coat retailer. The store’s accountant prepared the following income statement for the month ended Janua

kari74 [83]

Answer:

J Crane, Ltd

Contribution Margin Income Statement

For the Month ended January 31 YY

$ $

Sales revenue 750,000

Less Variable cost :

Cost of goods sold 300,000

Selling expenses 19,500

Admin Expense 37,500

357,000

Contribution Margin 393,000

Less Fixed cost :

Selling expense 4,060

Administrative expense 12,000

16,060

Net income 376,940

Working:

Number of Coat sold = 750,000/250 = 3000 coats

Variable costs:

Selling expenses = 6.5 x 3000 = 19500

Admin Expense = 750,000 x 5% = 37,500

Fixed cost:

Selling expenses = 23560 - 19500 = 4060

Admin Expense = 49,500 - 37,500 = 12,000

4 0

3 years ago

Under what conditions would a nation be viewed as being neither a net borrower nor a net lender in the international economy?.

irakobra [83]

Answer: trade balance of zero

Explanation:Trade deficits can be a good or a bad sign for an economy, and trade surpluses can be a good or a bad sign. Even a trade balance of zero—which just means that a nation is neither a net borrower nor lender in the international economy—can be either a good or bad sign.

7 0

2 years ago

An entrepreneur has purchased a gym franchise and been very disappointed in the results. The franchise has not earned what the e

dsp73

Well, she could not get a refund. So her best option is the sell the gym and RENT a yoga studio so she doesn't get disappointed again.

8 0

3 years ago