(Solved):Q: A segmented inco…

Question:

Question

A segmented income statement for Smith & Eason’s Armory as shown below:

  Shield Club Tear Gas Grenade Total
Sales Revenue $ 400,000 $ 200,000 $ 300,000 $ 900,000
Less: Variable Expenses 225,000 120,000 250,000 595,000
Contribution Margin $ 175,000 $ 80,000 $ 50,000 $ 305,000
Less Direct Fixed Expenses:        
Machine Rent (5,000) (20,000) (50,000) (75,000)
Supervision (15,000) (10,000) (20,000) (45,000)
Depreciation (35,000) (10,000) (25,000) (70,000)
Segment Margin $ 120,000 $ 40,000 $ (45,000) $ 115,000

Refer to the information for Smith & Eason’s Armory above. Smith & Eason’s management is deciding whether to keep or drop the Tear Gas Grenade product line.

Scroll to top