Kieda’s Adorning Company has two divisions and the following information available:

a. Net sales were $130,000. $90,000 was attributed to the Jewel Division.

b. Variable costs were $80,000. 40% was attributed to the Cosmetics Division.

c. Total separable fixed costs controllable by division managers were $30,000, of which $20,000 applied to the Jewel Division.

d. Total separable fixed costs, not controllable by division managers were $10,000 in the Jewel Division and $4,000 in the Cosmetics Division.

e. Unallocated costs were $7,000.

Required:

a)   Prepare a contribution approach income statement for the company as a whole and each division.
b)   Which division manager should receive a bonus? Why?

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