Question: Problem 3 (20 points) Middleton Associates has two divisions: A and B. During the year just ended, Division O had a segment margin of $9,000

Problem 3 (20 points)

Middleton Associates has two divisions: A and B. During the year just ended, Division O had a segment margin of $9,000 and variable costs equal to 70% of sales. Traceable fixed costs for Division E were $19,000. Hatch Company as a whole had a contribution margin of 40%, a segment margin of $25,000, Common costs of $10,000 and sales of $200,000. Given this data, prepare segmented income statements showing the Total as well as amounts for Division A and B.

Complete the following table. Use the next page to show your calculations for partial credits.

*Tip: Company Segment CM = Division A Segment CM + Division B Segment CM

	Total (Company)	Total (Company Percentage	Division A	Division A Percentage	Division B	Division B Percentage
Sales	$200000		$150000	?	$50000	?
Variable Cost	$120000	?	$105000	70%	$15000	?
Contribution Margin	$80000	40%	$45000	?	$35000	?
Traceable Fixed Cost	$55000		$36000		19,000
Segment Contribution Margin	$25,000		$9,000		$16000
Less: Common Cost	10,000
Operating Income	$15000

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