EXERCISE 4-5 Companywide and Segment Break-Even Analysis L04-50 oldsheV S-310x3 Piedmont Company segments its business into two regions-North and South. The company pre- pared the contribution format segmented income statement as shown below: stab ugros odi Sales Variable expenses. Contribution margin Traceable fixed expenses Segment margin Common fixed expenses. Net operating income.. Total Company $600,000 360,000 240,000 120,000 120,000 50,000 $ 70,000 Required: 1. 2. Compute the companywide break-even point in dollar sales. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. North South $400,000 $200,000 280,000 80,000 120,000 60,000 $ 60,000 120,000 60,000 $ 60,000

Exercise 11-15A (Algo) Using contribution margin format income statement to measure the magnitude of operating leverage LO 11-3, 11-4 The following income statement was drawn from the records of Benson, a merchandising firm:   BENSON COMPANY Income Statement For the Year Ended December 31 Sales revenue (4,500 units × $163) $ 733,500   Cost of goods sold (4,500 units × $82)   (369,000 ) Gross margin   364,500   Sales commissions (5% of sales)   (36,675 ) Administrative salaries expense   (85,000 ) Advertising expense   (34,000 ) Depreciation expense   (48,000 ) Shipping and handling expenses (4,500 units × $3)   (13,500 ) Net income $ 147,325       Required Reconstruct the income statement using the contribution margin format. Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Benson will earn if sales increase by 20 percent.

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Required information Exercise 23-9 (Algo) Segment elimination LO P4 [The following information applies to the questions displayed below] Suresh Company reports the following segment (department) income results for the year. Sales Expenses Avoidable Unavoidable Total expenses Income (loss) Department O Department P Department T Department M Department N $ 42,000 $ 80,000 Decision 16,300 57,000 73,300 $ 6,700 44,200 20,400 64,600 $ (22,600) Department o $ 76,000 Total $ 300,000 150,800 152,000 302,800 $ (2,800)

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Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Boyne Conway $270 Sales revenue Less: Variable expenses Contribution margin Less direct fixed expenses: Depreciation Salaries Alanson $1,280 $185 1,115 $165 50 95 $20 45 $140 15 85 $40 216 $54 12 100 $(58) Total $1,735 1,376 $359 77 280 $2 Segment margin Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different supervisor whose position would be eliminated if the associated product were dropped. Required: Conceptual Connection: Estimate the impact on profit that would result from dropping Conway. Enter amount in full, rather than in thousands. For example, "15000" rather than "15".

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