Managerial accounting 12 8 addingdropping segments

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Unformatted text preview: Adding/Dropping Segments Segment Income Statement Digital Watches Sales Less: variable expenses Variable manufacturing costs Variable shipping costs Commissions Contribution margin Less: fixed expenses General factory overhead Salary of line manager Depreciation of equipment Advertising - direct Rent - factory space General admin. expenses Net operating loss Managerial Accounting $ 500,000 $ 120,000 5,000 75,000 $ 60,000 90,000 50,000 100,000 70,000 30,000 200,000 $ 300,000 400,000 $ (100,000) 12-9 Adding/Dropping Segments IInvestigation has Segment Incometotal fixed general Investigation has revealed that t otal fixed general nvestigation revealed that Statement Investigation Digital Watches factory overhead and general ffactory overhead and general factory actory Sales $ 500,000 administrative expenses would not be affected if administrative expenses would not be affected if administrative expenses administrative Less: variable ttheariable manufacuring costs $ 120,000fixed he digital watch line is dropped. The fixed V digital watch line is d...
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