1 Segment Reporting & CVP (18 marks) 2 The Snow Shoes Division of True North Corporation produces and markets two snow shoes 3 for use in the snow: Extreme and Premium. The following data were gathered on activities for February 2022: 4 5 Extreme Premium 6 Sales in units 2,125 9,125 7 Selling price per unit $ 52.25 $ 22.25 8 Variable production costs per unit $ 20.00 $ 5.00 9 Traceable fixed production costs $ 12,000 $ 33,000 10 Variable selling expenses per unit $ 2.00 $ 1.00 11 Traceable fixed selling expenses $ 2,000 $ 3,000 12 Allocated division administrative expenses $ 40,000 $ 72,000 13 14 Required: 15 1. Prepare a properly formatted segmented income statement for last month, showing both "amount" and "percentages" (where applicable) for the division as a whole 16 and for each product. Display the percentages to the nearest 1 decimal place. enter your answers in the not 17 True North Corporation highlighted cells using proper cell referencing. NOT ALL CELLS 18 Segmented Income Statement NECESSARILY NEED TO BE USED 19 For the month ended February 28, 2022 Total Extreme Premium 21 $ % $ % $ % 22 Sales 23 24 25 26 20 14 Required: 15 1. Prepare a properly formatted segmented income statement for last month, showing both "amount" and "percentages" (where applicable) for the division as a whole 16 and for each product. Display the percentages to the nearest 1 decimal place. enter your answers in the not 17 True North Corporation highlighted cells using proper cell 18 Segmented Income Statement referencing. NOT ALL CELLS NECESSARILY NEED TO BE USED 19 For the month ended February 28, 2022 20 Total Extreme Premium 21 $ % $ % $ % 22 Sales 23 24 25 26 27 28 29 30 Operating income (loss) 31 32 33 2. Calculate the breakeven points in sales dollars for each of the product lines. i.e. breakeven for each product line would be where their respective 34 segment margins equal zero. 35 Extreme Premium 36 Breakeven sales dollars 37 36 Breakeven sales dollars 37 38 3. The sales manager wants to run a special promotional campaign on one of the product lines next month. A marketing study indicates the cost of 39 such a campaign and the corresponding potential increase in sales of the product line as follows: 40 Extreme Premium 41 Projected increase in sales $ 22,000 S 20,000 42 The promotional campaign is estimated to cost $ 10,000 43 44 Show your calculations to determine which product line should be chosen 45 46 47 48 49 Increase (decrease) in segment margin 50 51 Which product line do you recommend they focus the campaign on? 52 53 54 55 1 Segment Reporting & CVP (18 marks) 2 The Snow Shoes Division of True North Corporation produces and markets two snow shoes 3 for use in the snow: Extreme and Premium. The following data were gathered on activities for February 2022: 4 5 Extreme Premium 6 Sales in units 2,125 9,125 7 Selling price per unit $ 52.25 $ 22.25 8 Variable production costs per unit $ 20.00 $ 5.00 9 Traceable fixed production costs $ 12,000 $ 33,000 10 Variable selling expenses per unit $ 2.00 $ 1.00 11 Traceable fixed selling expenses $ 2,000 $ 3,000 12 Allocated division administrative expenses $ 40,000 $ 72,000 13 14 Required: 15 1. Prepare a properly formatted segmented income statement for last month, showing both "amount" and "percentages" (where applicable) for the division as a whole 16 and for each product. Display the percentages to the nearest 1 decimal place. enter your answers in the not 17 True North Corporation highlighted cells using proper cell referencing. NOT ALL CELLS 18 Segmented Income Statement NECESSARILY NEED TO BE USED 19 For the month ended February 28, 2022 Total Extreme Premium 21 $ % $ % $ % 22 Sales 23 24 25 26 20 14 Required: 15 1. Prepare a properly formatted segmented income statement for last month, showing both "amount" and "percentages" (where applicable) for the division as a whole 16 and for each product. Display the percentages to the nearest 1 decimal place. enter your answers in the not 17 True North Corporation highlighted cells using proper cell 18 Segmented Income Statement referencing. NOT ALL CELLS NECESSARILY NEED TO BE USED 19 For the month ended February 28, 2022 20 Total Extreme Premium 21 $ % $ % $ % 22 Sales 23 24 25 26 27 28 29 30 Operating income (loss) 31 32 33 2. Calculate the breakeven points in sales dollars for each of the product lines. i.e. breakeven for each product line would be where their respective 34 segment margins equal zero. 35 Extreme Premium 36 Breakeven sales dollars 37 36 Breakeven sales dollars 37 38 3. The sales manager wants to run a special promotional campaign on one of the product lines next month. A marketing study indicates the cost of 39 such a campaign and the corresponding potential increase in sales of the product line as follows: 40 Extreme Premium 41 Projected increase in sales $ 22,000 S 20,000 42 The promotional campaign is estimated to cost $ 10,000 43 44 Show your calculations to determine which product line should be chosen 45 46 47 48 49 Increase (decrease) in segment margin 50 51 Which product line do you recommend they focus the campaign on? 52 53 54 55