Omstadt Corporation produces and sells only two products that are referred to as RIPS and PITS. Production is "for order" only, and no finished goods inventories are maintained; work in process inventories are negligible. The following data relate to last month's operations:??RIPSPITS?Sales$180,000$180,000?Manufacturing costs:???Materials$18,000$24,000?Direct labor$54,000$48,000?Overhead$72,000$84,000?Selling expenses$14,400$10,080?Administrative expenses$12,000$18,000$36,000 of the manufacturing overhead assigned to RIPS and $72,000 of that assigned to PITS is fixed. The balance of the overhead is variable. Selling expenses consist entirely of commissions paid as a percentage of sales. Direct labor is completely variable. Administrative expenses are fixed and cannot
be traced to the products but have been arbitrarily allocated to the products.Required:Prepare a segmented income statement, in total and for the two products. Use the contribution approach.
What will be an ideal response?
? | ? | Total Company | RIPS | PITS |
? | Sales | $360,000 | $180,000 | $180,000 |
? | Variable expenses: | ? | ? | ? |
? | Materials | 42,000 | 18,000 | 24,000 |
? | Direct labor | 102,000 | 54,000 | 48,000 |
? | Manufacturing overhead | 48,000 | 36,000 | 12,000 |
? | Selling expense | 24,480 | 14,400 | 10,080 |
? | Total variable expenses | 216,480 | 122,400 | 94,080 |
? | Contribution margin | 143,520 | 57,600 | 85,920 |
? | Fixed expenses: | ? | ? | ? |
? | Manufacturing overhead | 108,000 | 36,000 | 72,000 |
? | Segment margin | 35,520 | $21,600 | $13,920 |
? | Common expense: | ? | ? | ? |
? | Administrative expense | 30,000 | ? | ? |
? | Net operating income | $5,520 | ? | ? |
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