Question

Need help filling in the chart below and answering the question.

                                         &nbs p;      Total Product X    Product Y
Number of units sold                         10,000     12,000
Selling price per unit                          20.00        25.00
Variable Cost per unit:
Production                                            9.00        10.00
Selling and Administrative               3.00        3.75
Fixed Costs:
Production                             155,000
Selling and Administrative 20,000

Of the fixed costs, only $50,000 of the fixed production costs is traceable to the production of product X and $75,000 is traceable to the product Y.

Prepare a segmented income statement for Bylund Company using the following form:

                                  Bylund company
                                 Income statement
                               for the month ended July 31

                                               &nbs p;      Total        Product X      Product Y
                                         &nbs p;          Amount % Amount %   Amount %
Sales                                          ; $____     ___ $____   ___ $____ ___
Less variable expenses
Production                                  ____    ___  ;  ____   ___    ____ ___
Selling & administrative          ____    ___   ____   ___    ____ ___
Total variable expenses          ____    ___   ____   ___    ____ ___
Contribution margin               ____    ___   ____   ___    ____ ___
Less traceable fixed expenses___    ___   ____   ___    ____ ___
Product line segment margin ____    ___   ____   ___    ____ ___

Should either product X or product Y be dropped? Why?