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

question 15

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 Lined?

• A)$29,000
• B)$26,000
• C)$44,000
• D)$21,500
• E)None of the answer choices is correct.

---

Definitions:

Rapidly Growing Company

A business experiencing a faster than average increase in its sales, revenues, or market size, often indicating successful performance and expansion.

Ego-Resilient Adult

Refers to an individual's ability to adapt to stress and adversity while maintaining their psychological well-being.

Social Awkwardness

Discomfort or ineptitude in social situations, often marked by an inability to interact fluently or appropriately with others.

Personal Meaning

The individual significance or value attributed to experiences, objects, or concepts by a person.