Orderly Headquarters,Inc The Company Incurred $1,500 as Fixed Costs

question 32

Essay

Orderly Headquarters,Inc.has two business segments: Commercial and Residential.The following data have been provided for the year ending December 31,20XX.
$\begin{array}{lll} & \text { Commercial } & \text { Residential } \\\text { Service Revenue } & \$ 5,900 & \$ 8,500 \\\text { Variable costs } & 3,500 & 5,400\end{array}$ The company incurred $1,500 as fixed costs.
Requirements:
a)Prepare the income statement of Orderly Headquarters showing the contribution margin of each segment.
b)Calculate the contribution margin ratio of each segment.Which segment is more profitable and why?

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Definitions:

Planning

The process of setting objectives, determining strategies, and outlining tasks and schedules to achieve the goals.

Managerial Efforts

The actions or initiatives taken by managers to achieve organizational goals.

Leadership

The act of guiding, directing, and influencing others towards the achievement of goals.

Planning

The process of defining an organization’s goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate activities.