Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement (in terms of the Brazilian currency, the real, R) for last month is given below: Divisions Total Company R 4, 675, 000 Leather R 1, 925, 000 Cloth R 2, 750, 000 1, 140, 000 1, 610, 000 Sales Variable expenses 2, 213, 000 1, 073, 000 2, 462, 000 852, 000 Contribution margin Traceable fixed expenses: Advertising Selling and administrative Depreciation Total traceable fixed expenses 810, 000 625, 000 265, 000 480, 000 390, 000 133, 000 330, 000 235, 000 132, 000 1,700, 000 1, 003, 000 697, 000 Divisional segment margin 762, 000 R 607, 000 R. 155, 000 Common fixed expenses 408, 000 Operating income R 354, 000 Top management can't understand why the Leather Division has such a low segment margin when its sales are only 30% less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the Leather Division be further segmented into product lines. The following information is available on the product lines in the Leather Division: Leather Division Product Lines Garments Shoes R820, 000 Handbags R425, 000 Sales Traceable fixed expenses: Advertising Selling and administrative Depreciation Variable expenses as a percentage of sales R680, 000 R 66, 000 R 48, 000 R 37, 000 R 85, 000 R 53, 000 R 74, 000 R179, 000 R 40, 000 R 21, 000 65% 50% 52% Analysis shows that R94,000 of the Leather Division's selling and administrative expenses are common to the product lines. 1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines. Product Line Leather Garments Shoes Handbags Division R R Traceable fixed expenses: Total traceable fixed expenses OR O R Common fixed expenses: R Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement (in terms of the Brazilian currency, the real, R) for last month is given below: Divisions Total Company R 4, 675, 000 Leather R 1, 925, 000 Cloth R 2, 750, 000 1, 140, 000 1, 610, 000 Sales Variable expenses 2, 213, 000 1, 073, 000 2, 462, 000 852, 000 Contribution margin Traceable fixed expenses: Advertising Selling and administrative Depreciation Total traceable fixed expenses 810, 000 625, 000 265, 000 480, 000 390, 000 133, 000 330, 000 235, 000 132, 000 1,700, 000 1, 003, 000 697, 000 Divisional segment margin 762, 000 R 607, 000 R. 155, 000 Common fixed expenses 408, 000 Operating income R 354, 000 Top management can't understand why the Leather Division has such a low segment margin when its sales are only 30% less than sales in the Cloth Division. As one step in isolating the problem, management has directed that the Leather Division be further segmented into product lines. The following information is available on the product lines in the Leather Division: Leather Division Product Lines Garments Shoes R820, 000 Handbags R425, 000 Sales Traceable fixed expenses: Advertising Selling and administrative Depreciation Variable expenses as a percentage of sales R680, 000 R 66, 000 R 48, 000 R 37, 000 R 85, 000 R 53, 000 R 74, 000 R179, 000 R 40, 000 R 21, 000 65% 50% 52% Analysis shows that R94,000 of the Leather Division's selling and administrative expenses are common to the product lines. 1. Prepare a contribution format segmented income statement for the Leather Division, with segments defined as product lines. Product Line Leather Garments Shoes Handbags Division R R Traceable fixed expenses: Total traceable fixed expenses OR O R Common fixed expenses: R
Expert Answer:
Answer rating: 100% (QA)
Solution 1 Product line leather div Garments Shoes Han... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259024900
9th canadian edition
Authors: Ray Garrison, Theresa Libby, Alan Webb
Posted Date:
Students also viewed these accounting questions
-
Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The companys contribution format segmented income statement (in terms of the Brazilian currency, the real, R) for last month is...
-
The Brown and Brinkley Brokerage firm is organized into two major sales divisions: institutional clients and retail clients. The firm also has two support departments: research and administration....
-
Severo S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format segmented income statement (in terms of the Brazilian currency Real) for last month is given...
-
At December 31, 2016, Pioneer Corporation reported the stockholders' equity accounts shown here (with dollar amounts in millions, except per-share amounts). Common stock $3.00 par value per share, 22...
-
What are the differences between the situation in discussion question #4 above and that of users of a brand new accounting information system?
-
On March 15, Pereira, Inc., paid property taxes of $600,000 for the calendar year. a. Prepare the journal entry to record the payment of property taxes on March 15. b. Determine the amount of...
-
The radial component of velocity of water leaving the centrifugal pump sketched in Fig. P12.7 is \(45 \mathrm{ft} / \mathrm{s}\). The magnitude of the absolute velocity at the pump exit is \(90...
-
Solano Company has sales of $500,000, cost of goods sold of $370,000, other operating expenses of $50,000, average invested assets of $1,600,000, and a hurdle rate of 6 percent. Required: 1....
-
Select at least two news articles that discuss demand, supply, and equilibrium price of two substitute products, like beef and chicken; butter and margarine. It can be two articles that discuss both...
-
1. Consider the following 6 workers. Their names are in column (1) and their respective utility functions are in column (2). a. The table. I've filled out Adam's row for you. Fill out the rest of the...
-
Identify a problem you want to solve at an individual organization Problem:(Automotive Union Strike) a. Task1will identify a problem on a topic of interest relating to a single business or...
-
In your view, what is the most important piece of information reported on the cash flow statement?
-
a. What are assets? b. What are the three major categories of assets?
-
Explain this statement: To minimize financial risk, match the cost structure to the revenue structure.
-
Briefly explain the three major categories shown on the cash flow statement.
-
a. What is the accounting identity? b. What is the implication of the accounting identity for the numbers on a balance sheet? c. What does the accounting identity tell us about a businesss equity?
-
List of Assets and Income of Daisy Lim Asset/Income Ownership Value Amount Owing Possible Enforcement Methods Court Form to file 1. Realty: home 78 Elizabeth St Zetland NSW 2017 Debtor joint tenant...
-
For the following exercises, find the inverse of the function and graph both the function and its inverse. f(x) = 4 x 2 , x 0
-
Jason brought home eight ducks from his last hunting trip in northern Ontario. His friend Harry dislikes any type of hunting, and to discourage Jason from further hunting, Harry has presented him...
-
Memtech Company is the exclusive distributor of a high-speed computer memory chip. The product sells for $50 per unit and has a CM ratio of 30%. The companys fixed expenses are $240,000 per year....
-
Sparn Limited incurs the following costs to produce and sell a single product: Variable costs per unit: Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
-
Temperature is an intensive property. State True (T) or False (F)
-
Kinetic energy is an extensive property. State True (T) or False (F)
-
A nozzle represents an open system. State True (T) or False (F)
Study smarter with the SolutionInn App