Wham-O is a distributor of board games and water toys manufactured by other companies. The company utilizes a shared Testing Facility where toys are safety tested. The Board Games division uses 3,000 testing hours a month. The Water Toys division uses 6,000 testing hours a month. The additional 1,000 hours are used testing R&D projects for the company. The total fixed costs of the Testing Facility were $100,000. Additionally, income and expense data for each division for the month of April 2012 follows:

Requirements
1. Calculate the rate per hour for Testing Facilities. Calculate the traceable fixed costs for each division.
2. Prepare an income statement for the company using the contribution margin approach. Calculate divisional segment margin for bothdivisions.

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Water Toys $300,000 Board Games $4.50,000 216,000 120,000 60,000 Sales revenue Variable cost of goods sold. Fixed cost of goods sold.... Variable selling expenses 120,000 40,000 ...