Question

Arctic Software Inc. has two product lines. The income statement for the year ended December 31 shows the following:
The products, Num 1 and Num 2, are sold in two territories, North and South, as follows:
The common fixed expenses are traceable to each territory as follows:
North fixed expenses ........................ $ 40,000
South fixed expenses ........................ 60,000
Home office administrative fixed expenses.. 20,000
Total common fixed expenses............. $120,000
The direct expenses of Num 1, $160,000, and of Num 2, $140,000, are not identifiable with either of the two territories.
Required:
1. Prepare income statements for the year, segmented by territory and including a column for the entire company.
2. Why are direct expenses of one type of segment report not direct expenses of another type of segment report?


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  • CreatedMarch 31, 2015
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