Question

Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information...

Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information relating to the products follow:

Product
Weedban Greengrow
Selling price per unit $ 11.00 $ 36.00
Variable expenses per unit $ 3.00 $ 14.00
Traceable fixed expenses per year $ 135,000 $ 49,000

  

Common fixed expenses in the company total $113,000 annually. Last year the company produced and sold 40,500 units of Weedban and 23,000 units of Greengrow.

Required:

Prepare a contribution format income statement segmented by product lines.

Product Line
Total Company Weedban Greengrow
Business   Accounting   
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Answer #1
Segmented Income Statement
Total Weedban Greengrow
Sales units 40500 23000
Selling price per unit 11 36
Variable cost perr unit 3 14
Sales revenue (Sales units*Selling price) 1273500 445500 828000
Less: Variable cost (Units *Variable cost) 443500 121500 322000
Contribution margin 830000 324000 506000
Less: Traceable fixed cost 184000 135000 49000
Segmented income margin 646000 189000 457000
Less: Common Fixed cost 113000
Net operating income 533000
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