Question

Digital 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 segmentreport?


$1.99
Sales3
Views109
Comments0
  • CreatedMay 05, 2014
  • Files Included
Post your question
5000