Kanata Nurseries Inc. produces poinsettias and fruit trees in a greenhouse/nursery operation.
The following information was provided for the coming year.

A sales commission of 3 percent of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $127,000 for the poinsettia line and $78,000 for the fruit tree line.
Common fixed overhead for the nursery operation was estimated to be $1,475,000; common selling and administrative expense was estimated to be $380,000.
Required:
Prepare a segmented income statement for Kanata Nurseries Inc. for the coming year, using variable costing.

Transcribed Image Text:

Fruit Trees Poinsettias Sales S1,200,000 $3,000,000 Variable cost of goods sold Direct fixed overhead 260,000 200,000