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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.

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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