A prepare income statements segmented by products. include, Ask an Expert

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Ellie Manufacturing company produces three products: A, B, and C. The income statement for 2013 is as follows:
Sales $200000
Less: Variable exp. $127,000
Contribution margin $73000
Less Fixed exp:
Manufacturing $20000
Selling and administrative $14000 $34,000
Net income $39,000
The Sales, contribution margin ratios, and direct fixed expenses for the three types of products are as follows:
A B C
Sales $60,000 $40,000 $100,000
Contribution margin ratio 35% 30% 40%
Direct fixed expenses of products $8000 $5000 $4000
required: a prepare income statements segmented by products. Include a column for the entire firm in the statement. b. if ellie manufactureing eliminates product B, what would be the impact on company profits? c. ellie is considering the purchase of automated assembly equipment for Product A. With that purchase, variable expenses ratio would be reduced by 10 percent and fixed manufacturing costs would increase by $3000. What would be the impact on company profits?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9448096

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