10014_040910_18 - Chapter 12 Handout Problems Sales Var...

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Chapter 12 Handout Problems Model X Model Y Sales 900,000 600,000 300,000 Var Expenses (477,000) 372,000 _______ CM 423,000 228,000 Fixed Expenses (350,000) (90,000) Net Income 73,000 (SM) 138,000 X Y Common 40,000 23,000 70,000 50,000 50,000 90,000 73,000 1. Compute the total contribution margin for model X. $228,000 600,000 x .62 = 372,000 600,000 – 372,000 = 228,000 2. Compute the total segment margin for model X. $138,000 228,000 – 90,000 (FE) = 138,000 3. Compute the total variable expenses for model Y. $105,000 477,000 – 372,000 = 105,000 4. Compute the total net income for the company (based on product lines) $73,000 900,000 – 477,000 = 423,000 423,000 – 163,000 = 260,000 260,000 – 187,000 = 73,000 (Nothing changes) 5. (T/F) For any segmented income statement, if we change the definition of segments ( say, for instance, changing from product lines to sales territories), the total traceable fixed costs will not change. False Performance Measures for Investment Centers
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This note was uploaded on 08/25/2010 for the course ACCT 208 taught by Professor Kingery during the Spring '08 term at University of Delaware.

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10014_040910_18 - Chapter 12 Handout Problems Sales Var...

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