Question

Assume the following information for a product line: Sales revenue $550,000 Variable manufacturing costs 100,000 Fixed manufacturing costs 75,000 Variable selling/administrative costs 60,000 Fixed selling/administrative costs 50,000 What is the product line's segment income

Answer 1

$265,000

Step-by-step explanation:

Calculation to determine the product line's segment income

Sales Revenue $550,000

Less: Variable Expenses ($160,000)

(100,000+60,000)

Contribution Margin $390,000

($550,000-$160,000)

Less: Fixed Expenses ($125,000)

(75,000+50,000)

Product Line Segment Income $265,000

($390,000-$125,000)

Therefore the product line's segment income will be$265,000