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Stanley Company

SetAttached Problem.

3. The Stanley Company produces and markets two product lines: Racquets and Gloves. The following data were gathered on activities during the third quarter:

Racquets Gloves

Sales in units 1,000 5,000
Sales price per unit $100 $40
Variable production costs per unit $20 $8
Traceable fixed production costs $20,000 $37,000
Variable selling expenses per unit $11 $2
Traceable fixed selling expenses $10,000 $23,000
Allocated portion of corporate expenses $6,000 $120,000

Required:

a. Prepare a segmented income statement for last quarter, showing both "Amount" and "Percent" columns for the division as a whole and for each product line.
b. Discuss the differences between traceable costs and common costs.

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Solution Preview

3. The Stanley Company produces and markets two product lines: Racquets and Gloves. The following data were gathered on activities during the third quarter:

Racquets Gloves

Sales in units 1,000 5,000
Sales price per unit $100 $40
Variable production costs ...

Solution Summary

This solution is comprised of a detailed explanation to prepare a segmented income statement for last quarter, showing both "Amount" and "Percent" columns for the division as a whole and for each product line.

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