Riley Corporation has two divisions: the Football Division and Baseball Division. Revenue and cost information relating to
Question:
Riley Corporation has two divisions: the Football Division and Baseball Division. Revenue and cost information relating to the products is as follows:
Football Div | Baseball Div | |
Units Sold | 40,000 | 50,000 |
Selling Price per unit | $ 25.00 | $ 17.00 |
Variable Product Costs per unit | $ 12.00 | $ 9.00 |
Variable Selling Costs per unit | $ 3.50 | $ 2.50 |
Total Traceable Fixed Costs | $ 65,000 | $ 85,000 |
Common fixed costs for Riley are made up of $40,000 in headquarters rent, $45,000 in insurance, and $108,000 in other administrative expenses.
Required: Prepare a contribution format income statement segmented by division:
Total | Football Div | Baseball Div | |
Sales | |||
Variable Costs | |||
Contribution Margin | |||
Traceable Fixed Costs | |||
Segment Margin | |||
Common Fixed Costs | |||
Net Operating Income |
What is the company’s overall break-even in sales dollars (fixed costs divided by CM%)?
If Riley spent $100,000 on Baseball Division advertising to increase total sales in the Baseball Division by 30%, how much would that change the segment margin for the Baseball Division?
Expert Answer:
Contribution Format Income Statement Total Football Workings Sales 185000000 10000... View the full answer
