hanks for using Office! We've made some updates to the privacy settings to give you more control. Your organization's admin allows you to use several di tings. These optional coud-backed services are provided to you under the Microsoft Services Agreement. Learn more fx A B D E Question 6 (13 marks) kaya is a Canadian furniture retailer that runs three segments - the living room, kitchen and bedroom segments. The bedroom appears to have a net operating loss. The CEO, Randall is wondering whether to wdrop the segment Sales revenue Variable costs Traceable fixed costs Allocated corporate costs Net Operating income Living Room Kitchen Bedroom $ 5,550,279 $ 4,316,884 $ 2,466,791 $ 12,333,954.00 1,942,598 2,220,112 1,387,570 5,550,279.30 296,015 394,687 296,015 986.716.32 2.128,239 1,418,826 1,182,355 4.729,419.00 1,183,428 $ 283,260 $ (399,149) / $ 1,067,539.38 a. Prepare a segment margin income statement showing each of the three divisions. Traceable fixed costs can be traced to each of the divisions. (8 marks) Bedroom Total Living Room Kitchen Sales revenue 5 Variable costs 6 Contribution Margin 7 Traceable fixed costs 48 Segment Margin 19 Allocated corporate costs 20 Net Operating income 21 Coversheet Q1 Q2 Q3 Q4 Q5 QE Formula Sheet Calculation Mode Automatic Workbook Statistics + fax B D E b. Randall, CEO, is concerned about the Bedroom division's operating loss; he wants to close the division to save money. Do you support his decision? Why or why not? (2 marks) 3 4 5 c. Which segment is the most profitable at the current sales level? (2 mark) 6 -7 To support your decision, first calculate segment margin as a percentage of sales for each segment: 28 Living Room Kitchen Bedroom 29 Segment margin percentage 30 31 Most profitable segment? 32 33 d. Why would it be misleading to determine which segment is the most profitable using segment margin in dollars? (1 mar 34 35 Coversheet 01 02 03 04 05 06 Formula Sheet Calculation Mode: Automatic Workbook Stan +