29 Jun The management of Reston Company is
Question
The management of Reston Company is disappointed with the company’s performance and is wondering what can be done to improve profits. Below is Reston Company’s contribution format income statement for the month of December.
Sales $900,000 100.0%
Variable expenses 408,000 45.3
Contribution margin 492,000 54.7
Fixed expenses 465,000 51.7
Net operating income $ 27,000 3.0
By examining sales and cost records, you have determined the following.
The company is divided into two sales territories – Central and Eastern. The Central Territory recorded $400,000 in sales and $208,000 in variable expenses during December. The remaining sales and variable expenses were recorded in the Eastern Territory. Fixed expenses of $160,000 and $130,000 are traceable to the Central and Eastern Territories respectively. The rest of the fixed expenses are common to the two territories.
Required:
Prepare a contribution format income statement showing the company broken down by sales territory. In addition show each item on the segmented income statement as a percentage of sales.
Look at the statement you have prepared showing the total company segmented by sales territory. What points revealed by this statement should be brought to management’s attention?
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.