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Basic segmented income statement

Caltech, Inc. produces and sells recordable CD and DVD packs. Revenue and cost information relating to the products follow:

Product
CD DVD
Selling price per pack $8.00 $25.00
Variable expense per pack $3.20 $17.50
Traceable fixed expenses per year $138,000 $45,000

Common fixed expenses in the company total of $105,000 annually. Last year the company produced and sold 37,500 CD packs and 18,000 DVD packs.

Prepare a contribution format income statement for the year segmented by product lines.

Solution Preview

Caltech, Inc. produces and sells recordable CD and DVD packs. Revenue and cost information relating to the products follow:

Product
CD DVD
Selling price per pack $8.00 $25.00
Variable expense per pack $3.20 $17.50
Traceable fixed ...

Solution Summary

This provides the steps to prepare the segmented income statement

$2.19