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Lesson #8, Assignment #2 - Student Name Class Problem 12-33...

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Student Name: Class: Problem 12-33 SEVERO S.A. Segmented Income Statement Brazil, currency Real Product Line Leather Division Garments Shoes Handbags Sales 1,500,000 500,000 700,000 300,000 Variable expenses 761,000 325,000 280,000 156,000 Contribution margin 739,000 175,000 420,000 144,000 Traceable fixed expenses: Advertising 312,000 80,000 112,000 120,000 Administration 107,000 30,000 35,000 42,000 Depreciation 114,000 25,000 56,000 33,000 Total traceable fixed expenses 533,000 135,000 203,000 195,000 Product line segment margin 206,000 40,000 217,000 (51,000) Common fixed expenses: Correct! Correct! Correct! Administrative 110,000 Divisional segment margin 96,000 Correct! SEVERO S.A. Segmented Income Statement Brazil, currency Real Sales Market Handbags Domestic Foreign Sales 300,000 200,000 100,000 Variable expenses 156,000 86,000 70,000 Contribution margin 114,000 114,000 30,000 Traceable fixed expenses: Advertising 120,000 40,000 80,000 Market segment margin 24,000 74,000 (50,000) Common fixed expenses: Correct! Correct! Administrative 42,000 Depreciation 33,000 Total 75,000 Product line segment margin (51,000) Correct! SEVERO S.A. Incremental Contribution Margin Brazil, currency Real Garments Shoes Contribution margin 175,000 420,000 Sales 500,000 700,000 Contribution margin ratio 35% 60% Incremental contribution margin: Increased sales of 200,000 70,000 145,000 87,000 Less cost of the promotional campaign
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