Question

In: Accounting

Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating...

Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow:

Product

Weedban Greengrow
Selling price per unit $ 10.00 $ 32.00
Variable expenses per unit $ 2.30 $ 13.00
Traceable fixed expenses per year $ 130,000 $ 48,000

Common fixed expenses in the company total $113,000 annually. Last year the company produced and sold 39,000 units of Weedban and 22,000 units of Greengrow.

Required:

Prepare a contribution format income statement segmented by product lines.


Product Line Total Company Weedban Greengrow

Sales $1,094,000 $390,000 $704,000

Variable expenses 375,70089 ________________ 286000

Traceable fixed income _____________ ______________ ______________

Contribution margin 718,300 300, 300    418,000

Traceable fixed expenses _________________ ______________________ ______________

7Product line segment margin7 718,300 $300,300 $418,000

Common fixed expenses not traceable to products __________________ ____________________ ______________

Net operating income $718,300 _____________________ __________________

Solutions

Expert Solution

total Weedban Greengrow
company
Sales          1,094,000         390,000         704,000
less variable cost             375,700            89,700         286,000
contribution margin             718,300         300,300         418,000
Traceable fixed expense             178,000         130,000            48,000
segment margin             540,300         170,300         370,000
common fixed cost             113,000
net income (loss)             427,300

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