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19 August, 21:49

Royal Lawncare Company produces and sells two packaged products. Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit $ 11.00 $ 36.00 Variable expenses per unit $ 3.00 $ 14.00 Traceable fixed expenses per year $ 136.000 $ 31.000 Common fixed expenses in the company total $96.000 annually. Last year the company produced and sold 37.000 units of Weedban and 15.500 units of Greengrow. Required: Prepare a contribution format income statement segmented by product lines. Product Line Total Company Weedban Greengrow Sales Variable expenses Contribution margin Traceable fixed expenses Product line segment margin Common fixed expenses not traceable to products Net operating income

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  1. 19 August, 22:17
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    Instructions are listed below.

    Explanation:

    Giving the following information:

    Weedban:

    Selling price per unit $ 11.00 (total = 37,000*11 = 407,000)

    Variable expenses per unit $ 3.00 (T=37,000*3 = 111,000)

    Traceable fixed expenses per year $ 136.000

    Greengrow:

    Selling price per unit $ 36.00 (T=15,500*36=558,000)

    Variable expenses per unit $ 14.00 (T = 15,500*14 = 161,000)

    Traceable fixed expenses per year $ 31.000

    Common fixed expenses in the company total $96.000 annually. Last year the company produced and sold 37.000 units of Weedban and 15.500 units of Greengrow.

    Income statement:

    Weedban Greengrow

    Sales = 407,000 558,000

    Variable cost = 111,000 161,000

    Contribution margin = 296,000 397,000

    Traceable fixed expense = 136,000 31,000

    Product line margin = 160,000 366,000

    Total = 526,000

    Common fixed expenses = 96.000

    Net operating income = 430,000
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