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Home Q & A Board Other Fields Homework Help Business Accounting
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Ryan37sport Ryan37sport
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A year ago
Bill Jones Flooring's accountant, has prepared the following income statement for the month of May.

​​ResidentialCommercialTotal
Sales Revenue$2,760,000$3,125,000 $5,885,000
Variable expenses    1,305,00  2,520,000  3,825,000
Contribution margin1,455,000605,000 2,060,000
Fixed expenses     645,000    615,0000  1,260,000
Operating income$   810,000$   (10,000)$   800,000

In preparing the income statement, Bill was unsure what to do with $240,000 in corporate fixed expenses that cannot be traced to a division. Since these costs were incurred to run the business, and he believed that each division benefited equally, he just allocated half to each division.

Required:

a.How do you think Bill should have handled the $240,000 in corporate fixed
expenses?
b.Prepare a segment margin income statement that highlights each division's
contribution
to corporate profits. Omit the heading.
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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richardbuggrichardbugg
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A year ago
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