Question

Conrad Company is evaluating its two divisions, North Division and South Division. Data for the North...

Conrad Company is evaluating its two divisions, North Division and South Division. Data for the North Division include sales of $530,000, variable costs of $290,000, and fixed costs of $260,000, 50% of which are traceable to the division. South Division’s data include sales of $610,000, variable costs of $340,000 and fixed costs of $290,000, 60% of which are traceable to the division.


Required:


a) Prepare a segmented income statement showing the details for the divisions and the company as a whole. Use a format that is useful for decision-making. Proper and full presentation for full marks.


b) Should either of the divisions be considered for elimination? Explain well for full marks. (1 mark)


c) The company’s sales manager believes that sales volume in theNorth Division could be increased by 15% if advertising was increased by $25,000. Would you recommend the increased advertising? Show calculations.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

In case of any doubts or Issues, please comment below

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Problem 2: Hallow Company has two divisions: North Division and South Division. The following report is...
Problem 2: Hallow Company has two divisions: North Division and South Division. The following report is for the most recent operating period: North Division South Division Sales $ 235,000 $ 192,000 Variable expenses $ 103,400 $ 105,600 Traceable fixed expenses $ 80,000 $ 58,000 Required: a. Prepare a segmented income statement in the contribution format for the company. b. What is the North Division's break-even in sales dollars? c. What is the South Division's break-even in sales dollars? d. What...
Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales,...
Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $380,000, 34%, and $7,600, respectively. The North Division’s contribution margin and contribution margin ratio are $83,600 and 38%, respectively. The South Division’s segment margin is $19,200. The company has $45,600 of common fixed expenses that cannot be traced to either division. Prepare an income statement for Shannon Company that uses the contribution format and is segmented...
Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales,...
Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $380,000, 34%, and $7,600, respectively. The North Division’s contribution margin and contribution margin ratio are $83,600 and 38%, respectively. The South Division’s segment margin is $19,200. The company has $45,600 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that uses the contribution format and is...
ch 6 exer 9 Shannon Company segments its income statement into its North and South Divisions....
ch 6 exer 9 Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $780,000, 50%, and $62,400, respectively. The North Division’s contribution margin and contribution margin ratio are $247,500 and 75%, respectively. The South Division’s segment margin is $68,000. The company has $117,000 of common fixed expenses that cannot be traced to either division.    Required: Prepare an income statement for Shannon Company that uses...
Data for January for Bondi Corporation and its two major business segments, North and South, appear...
Data for January for Bondi Corporation and its two major business segments, North and South, appear below: Sales revenues, North $ 660,000 Variable expenses, North $ 383,000 Traceable fixed expenses, North $ 79,000 Sales revenues, South $ 510,000 Variable expenses, South $ 291,000 Traceable fixed expenses, South $ 66,000 In addition, common fixed expenses totaled $179,000 and were allocated as follows: $93,000 to the North business segment and $86,000 to the South business segment. A properly constructed segmented income statement...
The Lamar Company manufactures wiring tools. The company is currently producing well below its full capacity....
The Lamar Company manufactures wiring tools. The company is currently producing well below its full capacity. The Boston Company has approached Lamar with an offer to buy 17,000 tools at $1.82 each. Lamar sells its tools wholesale for $1.92 each; the average cost per unit is $1.90, of which $0.34 is fixed costs. If Lamar were to accept Boston's offer, what would be the increase in Lamar's operating profits? The King Company has two divisions—North and South. The divisions have...
Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the...
Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period: Total Company Southern Division Northern Division Sales $ 267,000 $ 154,400 $ 112,600 Variable expenses $ 90,908 $ 57,128 $ 33,780 Traceable fixed expenses $ 126,800 $ 55,600 $ 71,200 Common fixed expense $ 53,400 $ 30,880 $ 22,520 The common fixed expenses have been allocated to the divisions on the basis of sales. The Northern Division’s break-even sales is...
Pherrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the...
Pherrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the most recent operating period: Bulb Division Seed Division Sales $ 238,500 $ 159,000 Variable expenses $ 62,010 $ 33,390 Traceable fixed expenses $ 144,480 $ 65,190 Common fixed expense $ 30,180 $ 20,120 The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is the Bulb Division’s break-even in sales dollars? b. What is the Seed...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the most recent operating period: Bulb Division Seed Division Sales $ 231,000 $ 154,000 Variable expenses $ 60,060 $ 32,340 Traceable fixed expenses $ 161,760 $ 70,840 Common fixed expense $ 29,460 $ 19,640 The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is the Bulb Division’s break-even in sales dollars? b. What is the Seed...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the...
Therrell Corporation has two divisions: Bulb Division and Seed Division. The following report is for the most recent operating period: Bulb Division Seed Division Sales $ 313,500 $ 209,000 Variable expenses $ 81,510 $ 43,890 Traceable fixed expenses $ 132,940 $ 94,050 Common fixed expense $ 29,880 $ 19,920 The common fixed expenses have been allocated to the divisions on the basis of sales. Required: a. What is the Bulb Division’s break-even in sales dollars? b. What is the Seed...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT