ABC Company operates two divisions with the following sales and expense information for the month of May:

Question:

ABC Company operates two divisions with the following sales and expense information for the month of May:
Division 1: sales, $240,000; contribution margin ratio, 50%; direct fixed expenses, $48,000.
Division 2: sales, $160,000; contribution margin ratio, 70%; direct fixed expenses, $32,000.
ABC Company’s total fixed expenses during May was $200,000.


Required:
Prepare a segmented income statement for ABC Company to determine the segment margin for Divisions 1 and 2 and the operating income for ABC Company.

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