P$24-31.$ Multiple Segment Reports

Worldwide Communications, Incorporated, sells telecommunication products throughout the world in

three sales territories: Europe, Asia, and the Americas. For July, all $$1,045,000$ of administrative expense

is traceable to the territories, except $$200,000,$ which is common to all units and cannot be traced or al$-$

located to the sales territories. The percentage of product line sales made in each of the sales territories

and the assignment of traceable fixed expenses follow:

The manufacturing takes place in one large facility with three distinct manufacturing operations.

Selected product$-$line cost data follow.

$*$Includes common costs of $$75,000$

The unit sales and selling prices for each product follow.

Required

a$.$ Prepare an income statement for July segmented by product line. Include a column for the entire

firm.

b$.$ Prepare an income statement for July segmented by sales territory. Include a column for the entire

firm.

c$.$ Prepare an income statement for July by product line for The Americas sales territory. Include a

column for the territory as a whole. Products are manufactured in a single facility. Although de$-$

preciation and supervision are allocated by product line, those costs are not allocated by territory.

d$.$ Discuss the value of multilevel segment reporting as a managerial tool. Compare and contrast the

benefits of the reports generated in parts $a,b,$ and $c.$