Exhibit 7-4
the Following Segmented Annual Income Statement Is for Paper

question 75

Multiple Choice

Exhibit 7-4
The following segmented annual income statement is for Paper Products,Inc.
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Product Lines }$
$\begin{array}{lrrrr}& \text { Plain } & \text { Lined } & \text { Color } & \text { Total }\\\text { Sales revenue } & \$ 25,000 & \$ 100,000 & \$ 125,000 & \$ 250,000 \\\text { Variable costs } & 15,000 & 50,000 & 85,000 & 150,000\\\text { Contribution margin } & \$ 10,000 & \$ 50,000 & \$ 40,000 & \$ 100,000 \\\text { Direct fixed costs } & 4,000 & 6,000 & 9,000 & 19,000\\\text {Allocated fixed costs }&\underline{\quad?\quad}&\underline{\quad?\quad}&\underline{\quad?\quad}&\underline{45,000}\\\text {Profit (loss) }&\underline{\$\quad?\quad}&\underline{\$\quad?\quad}&\underline{\$\quad?\quad}&\underline{\$\quad?\quad}\end{array}$

-Refer to Exhibit 7-4.If allocated fixed costs are based on sales revenue for each product line as a proportion of total sales revenue,what is the profit or (loss) for Plain?

• A)($9,000)
• B)$6,000
• C)$1,500
• D)($16,500)
• E)None of the answer choices is correct.

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Definitions:

Robert Plutchik

A psychologist known for his psychoevolutionary theory of emotion, which categorized emotions into eight primary types.

Primary Emotion

Basic emotions that are hard-wired in the brain and universally recognized, such as happiness, sadness, fear, and anger.

Secondary Emotions

Emotions that are more complex, often derived from basic emotions, and include feelings such as guilt, shame, and pride.

Subjective Well-being

An individual’s personal assessment of their overall happiness and life satisfaction.