Gorman Nurseries Inc. grows poinsettias and fruit trees in a green house/nursery operation. The following information was provided for the coming year.
Gorman Nurseries Inc. grows poinsettias and fruit trees in a green house/nursery operation. The |
following information was provided for the coming year. |
A sales commission of 4% of sales is paid for each of the two product lines. Direct fixed sell- |
ing and administrative expense was estimated to be $146,000 for the poinsettia line and $87,000 |
for the fruit tree line. |
Common fixed overhead for the nursery operation was estimated to be $800,000; common |
selling and administrative expense was estimated to be $450,000. |
Requuired: |
Prepare a segmented income statement for Gorman Nurseries for the coming year, using vari- |
able costing. |
Gorman Nurseries Inc. | ||||||
Segmented Income Statement | ||||||
Poinsettias | Fruit Trees | Total | ||||
Sales | $ 960,000 | $ 3,100,000 | ? | |||
Variable cost of goods sold | $ (460,000) | $ (1,600) | ? | |||
Variable selling expense* | ? | ? | ? | |||
Contribution margin | ? | ? | ? | |||
Less direct fixed expenses: | ||||||
Direct fixed overhead | $ (160,000) | $ (200,000) | $ (360,000) | |||
Direct selling and administrative | ? | ? | ? | |||
Segment margin | ? | ? | ? | |||
Less common fixed expenses: | ||||||
Common fixed overhead | ? | |||||
Common selling and administrative | ? | |||||
Operating income | ? | |||||
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