Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Weedban $9.00 $ 2.70 $ 129,000 Product Greengrow $ 35.00 $ 12.00 $ 44,000 Last year the company produced and sold 38,000 units of Weedban and 21,000 units of Greengrow. Its annual common fixed expenses are $100,000. Required: Prepare a contribution format income statement segmented by product lines. Total Company $ Product Line Weedban 0 0 0 $ 0 0 Greengrow $ 0 0
Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Weedban $9.00 $ 2.70 $ 129,000 Product Greengrow $ 35.00 $ 12.00 $ 44,000 Last year the company produced and sold 38,000 units of Weedban and 21,000 units of Greengrow. Its annual common fixed expenses are $100,000. Required: Prepare a contribution format income statement segmented by product lines. Total Company $ Product Line Weedban 0 0 0 $ 0 0 Greengrow $ 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost
information relating to the products follow:
Selling price per unit
Variable expenses per unit
Traceable fixed expenses per year
Product
Weedban
$9.00
$ 2.70
$ 129,000
Greengrow
$35.00
$ 12.00
$ 44,000
Last year the company produced and sold 38,000 units of Weedban and 21,000 units of Greengrow. Its annual
common fixed expenses are $100,000.
Required:
Prepare a contribution format income statement segmented by product lines.
Total
Company
$
Product Line
0
Weedban
0 $
0
0
0
Greengrow
$
0
0
Expert Solution
Step 1: Contribution format income statement
The contribution format income statement helps to distribute the fixed cost and variable cost. A contribution margin is the excess value of sales revenue over the variable cost. There is also an available amount to recover the fixed cost. Net operating income can be calculated by deducting the fixed cost from the contribution margin. Fixed cost can be traceable fixed cost or common fixed cost.
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