90.2K

Verified Solution

Link Copied!

Sheridan Equipment sells equipment to sports enthusiasts. Doug Sheridan, the company's president, just received the following income statement reporting the results of the past year. Baseball Soccer Basketball Total Sales revenue $1,190,000 $3,420,000 $2,256,000 $6,866,000 Variable cost of goods sold 807,000 2,223,000 1,809,600 4,839,600 Fixed cost of goods sold 109,400 178,200 157,200 444,800 Gross profit 273,600 1,018,800 289,200 1,581,600 Variable operating expenses 161,400 547,200 225,600 934.200 Fixed operating expenses 75,600 79,800 69,300 224,700 Common fixed costs 57,000 123,000 92,100 272,100 Operating income ($20,400) $268,800 ($97,800) $150,600 Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseball and basketball gear to concentrate solely on soccer gear. (a) Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. (If the amount is negative then enter with a negative sign preceding the number, e.g.-5,125 or parenthesis, e.g. (5,125).) Baseball Soccer $ $ $ $ 4 Sheridan Equipment sells equipment to sports enthusiasts. Doug Sheridan, the company's president, just received the following income statement reporting the results of the past year. Baseball Soccer Basketball Total Sales revenue $1,190,000 $3,420,000 $2,256,000 $6,866,000 Variable cost of goods sold 807,000 2,223,000 1,809,600 4,839,600 Fixed cost of goods sold 109,400 178,200 157,200 444,800 Gross profit 273,600 1,018,800 289,200 1,581,600 Variable operating expenses 161,400 547,200 225,600 934,200 Fixed operating expenses 75,600 79,800 69,300 224,700 Common fixed costs 57,000 123,000 92,100 272,100 Operating income ($20,400) $268,800 ($97,800) $150,600 Doug is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling baseball and basketball gear to concentrate solely on soccer gear. (a) Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. (If the amount is negative then enter with a negative sign preceding the number, e.g. -5,125 or parenthesis, e.g. (5,125).) Soccer Basketball Total $ $ $ $ $ $ e Textbook and Media

Answer & Explanation Solved by verified expert

See Answer