A value-driven car manufacturer, Blue, started its business more than 50 years ago, making and selling...

   

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A value-driven car manufacturer, Blue, started its business more than 50 years ago, making and selling a sedan body style. Sedans were popular at the time, and this one drove the success of Blue for years due to its practical yet stylish nature. As times changed Blue designed models in different body styles, and those models have outpaced sedans, as follows. Sales Variable costs Contribution margin Fixed costs Operating income (loss) Sedan $1,193.000 697.000 496,000 SUV 793.600 $4,162,000 1.991.000 2.171,000 892,000 $(297,600) $1,279,000 Truck $3,866.000 $1.985.000 1,802,000 1,091,000 894,000 2,064,000 1,200,000 Van $864.000 800.000 $94.000 The income statements above reflect the second consecutive year the sedan category has lost money. Blue is concerned about dropping this vehicle, however, since the company's success was originally built on it. Assume that 75% of the fixed costs shown in the original information, for all product lines, are direct fixed costs. The remaining fixed costs are common fixed costs, allocated to the product lines according to their sales volumes. Recast the product-line income statements detailing the direct and allocated fixed costs for each, including a subtotal for segment margin and an overall total column. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sales Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Allocated fixed costs Operating income $ $ $ $ Sedan $ $ SUV $ $ 5. $ Truck $ $ Van $ $ $ Total A value-driven car manufacturer, Blue, started its business more than 50 years ago, making and selling a sedan body style. Sedans were popular at the time, and this one drove the success of Blue for years due to its practical yet stylish nature. As times changed Blue designed models in different body styles, and those models have outpaced sedans, as follows. Sales Variable costs Contribution margin Fixed costs Operating income (loss) Sedan $1,193.000 697.000 496,000 SUV 793.600 $4,162,000 1.991.000 2.171,000 892,000 $(297,600) $1,279,000 Truck $3,866.000 $1.985.000 1,802,000 1,091,000 894,000 2,064,000 1,200,000 Van $864.000 800.000 $94.000 The income statements above reflect the second consecutive year the sedan category has lost money. Blue is concerned about dropping this vehicle, however, since the company's success was originally built on it. Assume that 75% of the fixed costs shown in the original information, for all product lines, are direct fixed costs. The remaining fixed costs are common fixed costs, allocated to the product lines according to their sales volumes. Recast the product-line income statements detailing the direct and allocated fixed costs for each, including a subtotal for segment margin and an overall total column. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sales Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Allocated fixed costs Operating income $ $ $ $ Sedan $ $ SUV $ $ 5. $ Truck $ $ Van $ $ $ Total

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It seems you are asking for help in filling out an adjusted income statement that applies the allocation of fixed costs based on sales volumes We can do this using the information provided in the imag... View the full answer