Chapter 10 Question 3Please fill out the red with an explanation for the numbers. The other two columns is basketball and the total column. Please include these as well. Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to eachdivision. (If the amount is negative then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, eg. (5,125).)BaseballSoccerSales Revenue13000003720000Less v: Variable ExpensesCost of Goods Sold877000 i2418000 iOperating Expenses175400i595200 iVariable Expenses10524003013200Contribution MarginTraceable Fixed Expenses200,000Common Fixed Expenses62000Operating Income262000Segment MarginOperating Income> Pharoah Equipment sells equipment to sports enthusiasts. Doug Pharoah, the company's president, just received the followingincome statement reporting the results of the past year.BaseballSoccerBasketballTotalSales revenue$1,300,000$3,720,000$2,446,000$7,466,000Variable cost of goods sold877,0002,418,0001,969,6005,264,600Fixed cost of goods sold118,400193,200170,200481,800Gross profit304,6001,108,800306,2001,719,600Variable operating expenses175,400595,200244,6001,015,200Fixed operating expenses81,60086,80075,300243,700Common fixed costs62,000133,000100,100295,100Operating income($14,400)$293,800($113,800)$165,600Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop sellingbaseball and basketball gear to concentrate solely on soccer gear.(a)Your answer is partially correct.Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to eachdivision. (If the amount is negative then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, eg. (5,125).)BaseballSoccerSales Revenue2413000003720000: Variable ExpensesLessCost of Goods Sold877000 i2418000 iOperating Expenses175400595200 iVariable Expenses10524003013200Contribution MarginTraceable Fixed Expenses200 000>

Solution:- Preparation of segment margin income statement as follows under:-

Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. (If the amount is negative then enter with a negative sign preceding the number, eg. -5,125 or parenthesis, eg. (5,125).) Baseball Soccer Sales Revenue 1300000 3720000 Less Variable Expenses Cost of Goods Sold 877000 i 2418000 Operating Expenses 175400 i 595200 i Variable Expenses 1052400 3013200 Contribution Margin Traceable Fixed Expenses 200,000 Common Fixed Expenses 62000 Operating Income 262000 Segment Margin Operating Income %24 %24

Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. (If the amount is negative then enter with a negative sign preceding the number, eg. -5,125 or parenthesis, eg. (5,125).) Baseball Soccer Sales Revenue 1300000 3720000 Less Variable Expenses Cost of Goods Sold 877000 i 2418000 Operating Expenses 175400 i 595200 i Variable Expenses 1052400 3013200 Contribution Margin Traceable Fixed Expenses 200,000 Common Fixed Expenses 62000 Operating Income 262000 Segment Margin Operating Income %24 %24

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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