Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $480,000, 36%, and $9,600, respectively. The North Division’s contribution margin and contribution margin ratio are $92,000 and 40%, respectively. The South Division’s segment margin is $32,500. The company has $62,400 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales. (Round your percentage answers to 1 decimal place (i. e. 0.1234 should be entered as 12.3

                                 Shannon Company

                         Segmented Income Statement

                                 Total Company        North                     South

                                                                   Division                 Division

Total sales                  480,000  100%      230,000  47.9%    250,000 52.1%

Variable costs            307,200   100%      138,000   44.9%    169,200  55.1%

Contribution margin   172,800   100%       92,000   53.2%     80,800  46.8%                        

Traceable fixed          100,800   100%       52,500   52.1%      48,300  47.9%

Segment income         72,000   100%       39,500   54.9%     32,500  45.1%

Common fixed             62,400   100%

Net income                    9,600   100%

North's total sales = $92,000 / 40% = $230,000

South's total sales = $480,000 - $230,000 = $250,000

South's contribution margin = $172,800 - $92,000 = $80,800

Total segment income = common fixed + net income = $62,400 + $9,600 = $72,000

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

in terms of experimental research, mcdonald’s charging different prices in the two cities relates to