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ayoismeisalex
ayoismeisalex
10.04.2020 • 
Business

Kraft Bowlen owns two sports franchises—the Bladers (a hockey team) and the Ballers (a basketball team). The following information was provided for the coming year.

Bladers Ballers
Sales $80,000,000 $180,000,000
Variable cost of goods sold 10,000,000 30,000,000
Direct fixed overhead 20,000,000 100,000,000
A sales commission of 5% of sales revenue is paid for each of the two sports franchises. Direct fixed selling and administrative expense was estimated to be $4,000,000 for the Bladers franchise and $10,000,000 for the Ballers franchise.

Common fixed overhead associated with owning the franchises was estimated to be $18,000,000; common selling and administrative expense was estimated to be $8,000,000.

Required:

Prepare a segmented income statement for Kraft Bowlen for the coming year, using variable costing.

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