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.

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.

  • CreatedMay 20, 2014
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