Tampermure Company has three product segments: Prefabrications, Castings, and Forging. Forging seems to be unprofitable and management is considering dropping the segment entirely. Fixed Costs have been separated into Direct and Common. Direct Fixed Costs are correlated to the product line. Common Fixed Costs are facility level activities allocated as a percentage of total revenue. Required: Compute the allocation of Common Fixed Costs and Net Operating Income for each segment and the total. Tampermure Company's management recommends that Forging be dropped immediately to increase profits. Show what happens to Tampermure Company's income statement if this happens. Hint: Use the original data to fill and compute amounts. 1 Management believes that by dropping Forging, sales of Prefabrications and Casting will decrease. What will the income statement look like if this happens? 2 Hint: Use the original data to fill and compute amounts. A Decrease in Prefabrications Sales Decrease in Casting Sales B C 7 F For an answer to be graded as correct, you must use an Excel formula: 1. Begin each formula with an = sign. 2. Reference cells, instead of entering values. Example: =B3+C3
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