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Case 12-52 Student Name:
Class:
1.
NORTH AMERICAN INDUSTRIES
Segmented Income Statement by Geographic Areas
For the Fiscal Year Ended April 30, 20x4
Geographic Areas
United States Canada Mexico Unallocated Total
Sales in unitsa
Furniture * * * *
Sports * * * *
Housewares * * * *
Total unit sales * * * *
Revenueb
Furniture * * * *
Sports * * * *
Housewares * * * *
Total revenue * * * *
Variable costsc
Furniture * * * *
Sports * * * *
Housewares * * * *
Total variable costs * * * *
Contribution margin * * * *
Fixed costs
Manufacturing overheadd* * * *
Depreciatione* * * *
Administrative and selling expenses * * * * *
Total fixed costs * * * * *
Operating income (loss) * * * * *
SUPPORTING CALCULATIONS:
aSales in units
Total units x % of Sales = Units Sold
United States
Furniture * * *
Sports * * *
Housewares * * *
Canada
Furniture * * *
Sports * * *
Housewares * * *
Mexico
Furniture * * *
Sports * * *
Housewares * * *
bRevenue
Units Sold Unit Price Revenue
United States
Furniture * * *
Sports * * *
Housewares * * *
Canada
Furniture * * *
Sports * * *
Housewares * * *
Mexico
Furniture * * *
Sports * * *
Housewares * * *
cVariable costs
Variable Variable Total
Production Selling Variable
Units Sold Cost/Unit Cost/Unit Cost
United States
Furniture * * * *
Sports * * * *
Housewares * * * *
Canada
Furniture * * * *
Sports * * * *
Housewares * * * *
Mexico
Furniture * * * *
Sports * * * *
Housewares * * * *
dManufacturing overhead
Total Area Proportion Allocated
Production Variable of Production
Overhead Costs Total Cost
United States * * * *
Canada * * * *
Mexico * * * *
Total * *
eDepreciation Expense
Area Proportion
Total Units of Allocated
Depreciation
Sold Total Depreciation
United States * * * *
Canada * * * *
Mexico * * * *
Total * *
2. Areas where the company’s management should focus its attention in order
to improve corporate profitability include the following:
Case 12-52 Student Name:
Class:
1.
NORTH AMERICAN INDUSTRIES
Segmented Income Statement by Geographic Areas
For the Fiscal Year Ended April 30, 20x4
Geographic Areas
United States Canada Mexico Unallocated Total
Sales in unitsa
Furniture 32,000 8,000 40,000 80,000
Revenueb
Furniture 512,000$ 128,000$ 640,000$ 1,280,000$
Sports 1,440,000 1,440,000 720,000 3,600,000
Fixed costs
Manufacturing overheadd165,000$ 135,000$ 200,000$ 500,000$
Depreciatione134,400 96,000 169,600 400,000
SUPPORTING CALCULATIONS:
aSales in units
Total units % of Sales Units Sold
United States
Furniture 80,000 0.40 32,000
bRevenue
Units Sold Unit Price Revenue
United States
Furniture 32,000 $16.00 512,000$
Instructor
McGraw-Hill/Irwin
Canada
Furniture 8,000 16.00 128,000
cVariable costs
Variable Variable Total
Production Selling Variable
Units Sold Cost/Unit Cost/Unit Cost
United States
Furniture 32,000 8.00$ 4.00$ 384,000$
Sports 36,000 19.00 5.00 864,000
dManufacturing overhead
Total Area Proportion Allocated
Production Variable of Production
Overhead Costs Total Cost
United States 500,000$ 1,584,000$ 33% 165,000$
eDepreciation Expense
Area Proportion
Total Units of Allocated
Depreciation Sold Total Depreciation
United States 400,000$ 84,000$ 33.6% 134,400$
2. Areas where the company’s management should focus its attention in order
to improve corporate profitability include the following:
• The income statement by product line shows that the furniture product line may not
be profitable. The furniture product line does have a positive contribution. However, the
considerably higher than those in other areas.
management should:
— Investigate the selling and administrative expenses in this area as they are
