MANAGERIAL ACCOUNTING CONNECT ACCESS
17th Edition
ISBN: 9781265750879
Author: Garrison
Publisher: MCG
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Chapter IE, Problem 15IE
1.
To determine
Introduction: An income statement is a profitability statement that represents the profit position of the business for a particular period. It is a financial statement prepared at the end of the year to determine the
To prepare: The new contribution format segmented income statement.
2 (a).
To determine
Introduction: An income statement is a profitability statement that represents the profit position of the business for a particular period. It is a financial statement prepared at the end of the year to determine the profit earned or loss incurred during the period.
To explain: The reason for accepting or not the management’s plan to eliminate the cookbook.
2 (b).
To determine
Introduction: An income statement is a profitability statement that represents the profit position of the business for a particular period. It is a financial statement prepared at the end of the year to determine the profit earned or loss incurred during the period.
The contribution margin for each product line.
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Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6]
Marwick's Planos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,492 per unit and then sells them
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Costs
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During August, Marwick's Planos, Incorporated, sold and delivered 62 planos.
Required 1
Required 2
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through contribution margin.
$933 per month
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Diversified Products, Inc., has recently acquired a small publishing company that Diversified
eOBLEM 13-28 Basic Segment Reporting; Activity-Based Cost Assignment [LO1]
Ddacts intends to operate as one of its investment centers. The newly acquired company
us three books that it offers for sale-a cookbook, a travel guide, and a handy speller.
Cech book sells for $10. The publishing company's most recent monthly income statement is
given below:
Product Line
Total
Travel
Guide
Handy
Speller
Company
Cookbook
Sales
$300,000
$90,000
$150,000
$60,000
Expenses:
Printing costs
Advertising .
General sales.
Salaries
Equipment depreciation
Sales commissions
General administration.
102,000
36,000
27,000
63,000
19,500
9,000
9,000
12,000
13,500
5,400
18,000
3,000
9,000
14,000
3,000
18,000
3,600
6,000
3,000
6,000
33,000
9,000
3,000
30,000
15,000
14,000
6,000
1,000
42,000
14,000
Warehouse rent
12,000
3,600
2,400
1,000
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1,000
Total expenses.
285,000
94,500
139,500…
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Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent
month for the two games appears below:
Sales
Variable expenses
Contribution margin
Fixed expenses
Net operating income
Claimjumper
$ 63,900
42,600
$ 21,300
Makeover
Total
$ 149,100 $ 213,000
106,500
149, 100
#1
$ 42,600
63,900
51,120
$ 12,780
Required:
1. What is the overall contribution margin (CM) ratio for the company?
2. What is the company's overall break-even point in dollar sales?
3. Prepare a contribution format income statement at the company's
the two products.
even point that shows the appropriate levels of sales for
Chapter IE Solutions
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