Exercise 12-1 (15 minutes)
Total Weedban Greengrow
Amount % Amount % Amount %
Sales* ... $300,000 100 $90,000 100 $210,000 100
Less variable expenses.. 183,000 61 36,000 40 147,000 70
Contribution margin... 117,000 39 54,000 60 63,000 30
Less traceable fixed
expenses... 66,000 22 45,000 50 21,000 10
Product line segment
margin ... 51,000 17 $ 9,000 10 $ 42,000 20
Less common fixed
expenses not trace-
able to products... 33,000 11
Net operating income.... $ 18,000 6
* Weedban: 15,000 units × $6 per unit = $90,000.
Greengrow: 28,000 units × $7.50 per unit = $210,000.
Variable expenses are computed in the same way.
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