Segment Reporting and Analysis The Essential Baking Company bakes artisan loaves, baguettes, and rolls and sells them in cities throughout the Northwest Assume the following March income statement was prepared for the stores located in Seattle and Portland: THE ESSENTIAL BAKING COMPANY Territory Income Statements For Month of March (in thousands) Seattle Portland Total Sales $8,400 $6,800 $15,200 Cost of goods sold 4,796 3,894 8,690 Gross profit 3,604 2,906 6,510 Selling and admlnistrative expenses 2,755 2,155 4,910 Net income $849 $751 $1,600 Sales and selected variable expense data are as follows: Products caves Baguette: Rolls Fixed baking expenses $565 $450 $410 Variable baking expenses as a percentage of sales 50% 50% 40% Variable selling expenses as a percentage of sales 10% 20% 20% City of Seattle, sales (in thousands) $3,800 $2,650 $1,950 City of Portland, sales (in thousands) $3,250 $2,150 $1,400 The fixed selling expenses were $1,440 for March, of which $860 was a direct expense of the Seattle market and $580 was a direct expense of the Portland market. Fixed administrative expenses were $1,135, which management has decided not to allocate when using the contribution approach, Required 4 Required a' Prepare a segment income statement showing the margin for each territory (city) for March. Include a column combining the two territories, Note: Do not use a negative sign with your answers, The Essential Baking Company Territory and Company Income Statements For the Month of March (in thousands) Seattle Portland Sales 3 8,400 V 5 6,800 V $ 15,200 V Variable expenses: Baking 4,005 V 3,260 V 7,265 V Selling 1,300 V 1,035 V 2,335 V Contributlon margin 3,095 V 2,505 V 5,600 V Direct fixed selling expenses 860 V 5,800 x 1,440 V Territory margin 3 2,235 V $ 1,925 V 4,160 V Common xed expenses: Baking 1,425 V Administrative 1,135 V Netincome $ 1,600 V [3. Prepare segment income statements showing the product margin for each product Include a column for the combined products. Note: Do not use a negative Sign with your answers. The Essential Baking company Product and Company Income Statements For the Month of March (in thousands) Loaves Baguettes Rolls Company Sales: Net Income $ 1,bUU V [3. Prepare segment income statements showing the product margin for each product. Include a column for the combined products. Note: Do not use a negative sign with your answers. The Essential Baking company Product and Company Income Statements For the Month of March (in thousands) Loaves Baguettes Rolls Company Sales: Seattle 3 3,800 V $ 2.650 V $ 1,950 V 3 8,400 V Portland 3,250 V 2.150 V 1.400 V 6,800 V Total 7,050 V 4,800 V 3,350 V 15,200 V Variable expenses:* Baking 3,525 V 2.400 V 1.340 V 7,265 V Selling 705 V 960 V 670 V 2,335 V Total 4,230 V 3.360 V 2,010 V 9,600 V Contribution margin 2,820 V 1.440 V 1.340 V 5,500 V Fixed baking expenses 565 V 450 V 410 V 1,425 V Product margin $ 2,255 V 5 990 V $ 930 V 4,175 V Common xed expenses: Selling 1,440 V Administrative 1,135 V Total 2,575 V Netincome $ 1,600 V c. If the rolls line is dropped and fixed baking expenses do not change, what is the product margin for loaves and baguettes? What is the companyawide adjusted net income? Note: Round your answers below to the nearest whole dollar. Fixed baking expenses 565 450 410 1,425 Product margin $ 2,255 V $ 990 ~ $ 930 4,175 Common fixed expenses: Selling 1,440 Administrative 1,135 Total 2,575 Net income $ 1,600 c. If the rolls line is dropped and fixed baking expenses do not change, what is the product margin for loaves and baguettes? What is the company-wide adjusted net income? Note: Round your answers below to the nearest whole dollar. (in thousands) Product margin for loaves: $ 1,398 x Product margin for baguettes: $ 407 X Net income: $ 670 X