ACCT640 – Chapter 5 – Homework

ACCT640 – Chapter 5 – Homework

Michaels Company segments its income statement into its East and West Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $600,000, 50%, and $50,000, respectively. The West Division’s contribution margin and contribution margin ratio are $150,000 and 75%, respectively. The East Division’s segment margin is $70,000. The company has $60,000 of common fixed costs that cannot be traced to either division.

 

Required:

Prepare an income statement for Michaels Company that uses the contribution format and is segmented by divisions. (Round your percentage answers to 1 decimal place.)

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