Dickson Industries Has Two Divisions: the North Division and the South

question 142

Essay

Dickson Industries has two divisions: the North Division and the South Division. Information relating to the divisions for the year just ended is as follows:
$\begin{array}{lrr}&\text { North}&\text { South}\\\text { Units produced and sold}&40,000&50,000\\\text { Selling price per unit}&\$9&\$16\\\text { Variable costs per unit } & 4 & 6 \\\text { Direct fixed cost } & 148,000& 220,000\\\text { Common fixed cost } & 140,000& 140,000\end{array}$

Common fixed expenses have been allocated equally to each of the two divisions.
Required:
Prepare a segmented income statement for Dickson.

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Definitions:

New York Stock Exchange

One of the largest stock exchanges in the world, located in New York City, where stocks are bought and sold.

Negative Amortization

A situation in which the principal balance on a loan increases because the payments made do not cover the interest due.

Early Payments

Early payments are payments made before their due date, which can help reduce the amount of interest owed over time on loans.

Monthly Interest Charge

The amount charged by a lender to a borrower for the use of assets on a monthly basis, calculated as a percentage of the principal.