Part $4$: Relates to Module $24.$

Barbecue Industries produces two products, Barbecue sauce and Barbecue seasoning. Information relating to the products for October is as follows:

Barbecue Sauce Barbecue Seasoning

Units produced and sold $19,00016,000$

Selling price per unit $$20$ $$4$

Variable expenses per unit $$7$ $$3$

Direct fixed expenses by product

Barbecue Sauce $$50,000$

Barbecue Seasoning $$40,000$

Common Fixed Expenses $$20,000$

Required:

$1.$ Design a segmented income statement showing the $2$ product costs and a company total column. The segmented income statement should be developed to assist management in the decision making of questions listed in $2-4$ below.

Use only cell references for #$1$ to develop your numeric part of the segmented income statement.

Barbecue Industries

Segmented Income Statement

For the Month Ended October $31,20$XX

Barbecue Sauce Barbecue Seasoning Barbecue Industries Total

$2.$ What would be the dollar effect on the company's profit if Barbecue Sauce is dropped? Provide the overall change in income and the impact positive or negative on company income.

$3.$ What would be the dollar effect on the company's profit if Barbecue Seasoning is dropped? Provide the overall change in income and the impact positive or negative on company income.

$4.$ Would you recommend that Barbecue Industries drop Barbecue Sauce or Barbecue Seasoning? Why or why not?