margin and contribution margin ratio are $150,000 and 75%, respec-tively. The East Division's segment margin is $70,000. The company has $60,000 of common fixed costs that cannot be traced to either division. Required: Prepare an income statement for Michaels Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Michaels Company segments its
income statement into its East and
West Divisions. The company's overall
sales, contribution margin ratio, and
net operating income are $600,000,
50%, and $50,000, respectively.
The West Division's contribution
margin and contribution margin ratio
are $150,000 and 75%, respec-tively.
The East Division's segment margin is
$70,000. The company has $60,000 of
common fixed costs that cannot be
traced to either division.
Required:
Prepare an income statement for
Michaels Company that uses the
contribution format and is segmented
by divisions. In addition, for the
company as a whole and for each
segment, show each item on the
segmented income statements as a
percent of sales
Transcribed Image Text:Michaels Company segments its income statement into its East and West Divisions. The company's overall sales, contribution margin ratio, and net operating income are $600,000, 50%, and $50,000, respectively. The West Division's contribution margin and contribution margin ratio are $150,000 and 75%, respec-tively. The East Division's segment margin is $70,000. The company has $60,000 of common fixed costs that cannot be traced to either division. Required: Prepare an income statement for Michaels Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales
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