Shannon Company segments its income statement into its North

Shannon Company segments its income statement into its North and South Divisions. The company\'s overall sales, contribution margin ratio, and net operating income are $480,000, 36%, and $9,600, respectively. The North Division\'s contribution margin and contribution margin ratio are $92,000 and 40%, respectively. The South Division\'s segment margin is $32.500. The company has $62.400 of common fixed expenses that cannot be traced to either division. Required Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales. (Round your percentage answers to 1 decimal place (i.e 1234 should be entered as 12.3)) Total Company North South Amount Amount Amount

Solution

Contribution format income statement :

			Divisions
	Total company	North	South
	Amount	%	Amount	%	Amount	%
Sales revenue	480000	100%	230000	100%	250000	100%
Variable cost	307200	64%	138000	60%	169200	67.7%
Contribution margin	172800	36%	92000	40%	80800	32.3%
Traceable fixed expense	100800	21%	52500	22.8%	48300	19.3%
Segment margin	72000	15%	39500	17.2%	32500	13.0%
Common Fixed expense	62400	13%
Net operating income	9600	2%