Question

Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $ 500,000, 46%, and $ 10,000, respectively. The North Division’s contribution margin and contribution margin ratio are $ 150,000 and 50%, respectively. The South Division’s segment margin is $ 30,000. The company has $ 90,000 of common fixed expenses that cannot be traced to either division.

Required:
Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. 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.



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  • CreatedMay 20, 2014
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