ACCT640 - Chapter 5 - Homework

Michaels Company segments its income statement into its East and West Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $600,000, 50%, and $50,000, respectively. The West Division’s contribution margin and contribution margin ratio are $150,000 and 75%, respectively. The East Division’s segment margin is $70,000. The company has $60,000 of common fixed costs that cannot be traced to either division.

Prepare an income statement for Michaels Company that uses the contribution format and is segmented by divisions. (Round your percentage answers to 1 decimal place.)