What insights revealed by this statement should be brought to the attention of management? Look at the statement you have prepared showing the total company segmented by sales terri-tory. What insights revealed by this statement should be brought to the attention of management?

PROBLEM 6–21 Segment Reporting and Decision-Making [LO6–4]

Vulcan Company’s contribution format income statement for June is given below:

Vulcan Company

Income Statement

For the Month Ended June 30

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $750,000

Variable expenses . . . . . . . . . . . . . . . . . . . . . . . 336,000

Contribution margin . . . . . . . . . . . . . . . . . . . . . . 414,000

Fixed expenses . . . . . . . . . . . . . . . . . . . . . . . . . 378,000

Net operating income . . . . . . . . . . . . . . . . . . . . $ 36,000

 

 

 

 

 

Management is disappointed with the company’s performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following:

 

  1. The company is divided into two sales territories—Northern and Southern. The Northern ter-ritory recorded 0,000 in sales and $156,000 in variable expenses during June; the remain-ing sales and variable expenses were recorded in the Southern territory. Fixed expenses of $120,000 and $108,000 are traceable to the Northern and Southern territories, respectively. The rest of the fixed expenses are common to the two territories

 

  1. The company is the exclusive distributor for two products—Paks and Tibs. Sales of Paks and Tibs totaled $50,000 and $250,000, respectively, in the Northern territory during June. Vari-able expenses are 22% of the selling price for Paks and 58% for Tibs. Cost records show that $30,000 of the Northern territory’s fixed expenses are traceable to Paks and $40,000 to Tibs, with the remainder common to the two products.

 

Required:

  1. Prepare contribution format segmented income statements first showing the total company broken down between sales territories and then showing the Northern territory broken down by product line. 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.

 

  1. Look at the statement you have prepared showing the total company segmented by sales terri-tory. What insights revealed by this statement should be brought to the attention of management?

 

  1. 3. Look at the statement you have prepared showing the Northern territory segmented by product lines. What insights revealed by this statement should be brought to the attention of management? Look at the statement you have prepared showing the total company segmented by sales terri-tory. What insights revealed by this statement should be brought to the attention of management?

S

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency

Order your essay today and save 10% with the discount code tCPCOVID10