The marketing segment sales for Caterpillar Inc. (CAT) for a recent year follow: Caterpillar Inc.Machinery and Engines Marketing Segment Sales(in millions) BuildingConstructionProducts CatJapan CoreComponents Earthmoving ElectricPower Excavation LargePowerSystems Logistics Marine &PetroleumPower Mining Turbines Sales $2,217 $1,225 $1,234 $5,045 $2,847 $4,562 $2,885 $659 $2,132 $3,975 $3,321 In addition, assume the following information: BuildingConstructionProducts CatJapan CoreComponents Earthmoving ElectricPower Excavation LargePowerSystems Logistics Marine &PetroleumPower Mining Turbines Variable cost of goods sold as a percent of sales 45% 55% 49% 51% 54% 52% 53% 50% 50% 52% 48% Dealer commissions as a percent of sales 9% 11% 8% 8% 10% 6% 5% 10% 9% 7% 9% Variable promotion expenses (in millions) 310 120 150 600 200 600 300 75 270 480 400 a. Use the sales information and the additional assumed information to prepare a contribution margin by segment report. Round answers to two decimal places, except for contribution margin ratio, which should be rounded to one decimal place. Enter all amounts as positive numbers. Caterpillar Inc. Contribution Margin by Segment (assumed) (in millions, except ratio figures) Building Construction Products Cat Japan Core Components Earthmoving Electric Power Excavation Large Power Systems Logistics Marine and Petroleum Power Mining Turbines Sales $ $ $ $ $ $ $ $ $ $ $ Variable cost of goods sold Manufacturing margin $ $ $ $ $ $ $ $ $ $ $ Dealer commissions $ $ $ $ $ $ $ $ $ $ $ Variable promotion expenses Variable selling expenses $ $ $ $ $ $ $ $ $ $ $ Contribution margin $ $ $ $ $ $ $ $ $ $ $ Contribution margin ratio % % % % % % % % % % % b. Prepare a table showing the manufacturing margin, dealer commissions, and variable promotion expenses as a percent of sales for each segment. Round percents to one decimal place, if required. Enter all amounts as positive numbers. Caterpillar Inc. Contribution Margin by Segment (assumed) (in millions, except ratio figures) Building Construction Products Cat Japan Core Components Earthmoving Electric Power Excavation Large Power Systems Logistics Marine and Petroleum Power Mining Turbines Manufacturing margin % % % % % % % % % % % Dealer commissions % % % % % % % % % % % Variable promotion expenses % % % % % % % % % % % Contribution margin ratio % % % % % % % % % % %

The marketing segment sales for Caterpillar Inc. (CAT) for a recent year follow: Caterpillar Inc.Machinery and Engines Marketing Segment Sales(in millions) BuildingConstructionProducts CatJapan CoreComponents Earthmoving ElectricPower Excavation LargePowerSystems Logistics Marine &PetroleumPower Mining Turbines Sales $2,217 $1,225 $1,234 $5,045 $2,847 $4,562 $2,885 $659 $2,132 $3,975 $3,321 In addition, assume the following information: BuildingConstructionProducts CatJapan CoreComponents Earthmoving ElectricPower Excavation LargePowerSystems Logistics Marine &PetroleumPower Mining Turbines Variable cost of goods sold as a percent of sales 45% 55% 49% 51% 54% 52% 53% 50% 50% 52% 48% Dealer commissions as a percent of sales 9% 11% 8% 8% 10% 6% 5% 10% 9% 7% 9% Variable promotion expenses (in millions) 310 120 150 600 200 600 300 75 270 480 400 a. Use the sales information and the additional assumed information to prepare a contribution margin by segment report. Round answers to two decimal places, except for contribution margin ratio, which should be rounded to one decimal place. Enter all amounts as positive numbers. Caterpillar Inc. Contribution Margin by Segment (assumed) (in millions, except ratio figures) Building Construction Products Cat Japan Core Components Earthmoving Electric Power Excavation Large Power Systems Logistics Marine and Petroleum Power Mining Turbines Sales $ $ $ $ $ $ $ $ $ $ $ Variable cost of goods sold Manufacturing margin $ $ $ $ $ $ $ $ $ $ $ Dealer commissions $ $ $ $ $ $ $ $ $ $ $ Variable promotion expenses Variable selling expenses $ $ $ $ $ $ $ $ $ $ $ Contribution margin $ $ $ $ $ $ $ $ $ $ $ Contribution margin ratio % % % % % % % % % % % b. Prepare a table showing the manufacturing margin, dealer commissions, and variable promotion expenses as a percent of sales for each segment. Round percents to one decimal place, if required. Enter all amounts as positive numbers. Caterpillar Inc. Contribution Margin by Segment (assumed) (in millions, except ratio figures) Building Construction Products Cat Japan Core Components Earthmoving Electric Power Excavation Large Power Systems Logistics Marine and Petroleum Power Mining Turbines Manufacturing margin % % % % % % % % % % % Dealer commissions % % % % % % % % % % % Variable promotion expenses % % % % % % % % % % % Contribution margin ratio % % % % % % % % % % %

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 9.2.1P

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Question

The marketing segment sales for Caterpillar Inc. (CAT) for a recent year follow:

	Caterpillar Inc. Machinery and Engines Marketing Segment Sales (in millions)
	Building Construction Products	Cat Japan	Core Components	Earth moving	Electric Power	Excavation	Large Power Systems	Logistics	Marine & Petroleum Power	Mining	Turbines
Sales	$2,217	$1,225	$1,234	$5,045	$2,847	$4,562	$2,885	$659	$2,132	$3,975	$3,321

In addition, assume the following information:

	Building Construction Products	Cat Japan	Core Components	Earth moving	Electric Power	Excavation	Large Power Systems	Logistics	Marine & Petroleum Power	Mining	Turbines
Variable cost of goods sold as a percent of sales	45%		55%		49%		51%		54%		52%	53%	50%	50%	52%	48%
Dealer commissions as a percent of sales	9%		11%		8%		8%		10%		6%	5%	10%	9%	7%	9%
Variable promotion expenses (in millions)	310		120		150		600		200		600	300	75	270	480	400

a. Use the sales information and the additional assumed information to prepare a contribution margin by segment report. Round answers to two decimal places, except for contribution margin ratio, which should be rounded to one decimal place. Enter all amounts as positive numbers.

Caterpillar Inc.
Contribution Margin by Segment (assumed)
(in millions, except ratio figures)
	Building Construction Products	Cat Japan	Core Components	Earthmoving	Electric Power	Excavation	Large Power Systems	Logistics	Marine and Petroleum Power	Mining	Turbines
Sales	$	$	$	$	$	$	$	$	$	$	$
Variable cost of goods sold
Manufacturing margin	$	$	$	$	$	$	$	$	$	$	$
Dealer commissions	$	$	$	$	$	$	$	$	$	$	$
Variable promotion expenses
Variable selling expenses	$	$	$	$	$	$	$	$	$	$	$
Contribution margin	$	$	$	$	$	$	$	$	$	$	$
Contribution margin ratio	%	%	%	%	%	%	%	%	%	%	%

b. Prepare a table showing the manufacturing margin, dealer commissions, and variable promotion expenses as a percent of sales for each segment. Round percents to one decimal place, if required. Enter all amounts as positive numbers.

Caterpillar Inc.
Contribution Margin by Segment (assumed)
(in millions, except ratio figures)
	Building Construction Products	Cat Japan	Core Components	Earthmoving	Electric Power	Excavation	Large Power Systems	Logistics	Marine and Petroleum Power	Mining	Turbines
Manufacturing margin	%	%	%	%	%	%	%	%	%	%	%
Dealer commissions	%	%	%	%	%	%	%	%	%	%	%
Variable promotion expenses	%	%	%	%	%	%	%	%	%	%	%
Contribution margin ratio	%	%	%	%	%	%	%	%	%	%	%

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