Question: Tesla Inc. provided the following data for its two product lines: Product Line Sales ($) Variable Costs ($) Fixed Costs ($) Model S 15,000,000 9,000,000
Tesla Inc. provided the following data for its two product lines:
Product Line | Sales ($) | Variable Costs ($) | Fixed Costs ($) |
Model S | 15,000,000 | 9,000,000 | 4,000,000 |
Model 3 | 25,000,000 | 15,000,000 | 6,000,000 |
Requirements:
- Prepare a segmented Income Statement.
- Calculate the segment margin for each product line.
- Determine the total company-wide Contribution Margin.
- Analyze the impact of discontinuing Model S on Tesla's overall profitability.
- Discuss the pros and cons of segment reporting.
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