Prepare a monthly income statement that highlights the proposed sock line's segment margin. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Thomas Taylor Monthly Income Statement Sales revenue 2$ 341600 Cost of goods sold Variable expenses $ 230580 Commissions 29036 201544 Contribution margin 140056 Traceable fixed expenses Advertising 10900 Traceable fixed expenses 14518 25418 Segment margin $ 114638
Thomas Taylor, an up-and-coming fashion designer, created a new line of men’s fashion socks in response to the growing number of celebrities who are expressing their individuality by replacing traditional navy and black socks with brighter colors and bold patterns. At a sales price of $14 per pair, Thomas estimates monthly sales volume will be 24,400 pairs. Variable product costs will be $9.45 per pair and fixed overhead will be $2.00 per pair. Sixty percent of the fixed overhead is directly traceable to the new sock line. To promote the socks, Taylor proposes a $1.19 per pair commission to the company’s salespeople and a $10,900 per month advertising campaign. In compliance with corporate policy, the socks will also be allocated $44,900 in fixed corporate support costs.
Prepare a monthly income statement that highlights the proposed sock line’s segment margin.
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