Brabant NV of the Netherlands is a wholesale distributor of Dutch - 17498

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Brabant NV of the Netherlands is a wholesale distributor of Dutch cheeses that it sells throughout the European Community. Unfortunately, the company’s profits have been declining, which has caused considerable concern. To help understand the condition of the company, the managing director of the company has requested that the monthly income statement be segmented by sales territory. Accordingly, the company’s accounting department has prepared the following statement for March, the most recent month. (The Dutch currency is the euro which is designated by €.)



Sales Territory

  Sales 300,000     800,000      700,000    

  Territorial expenses (traceable):            
       Cost of goods sold   93,000       240,000        315,000    
       Salaries   54,000       56,000        112,000    
       Insurance   9,000       16,000        14,000    
       Advertising   105,000       240,000        245,000    
       Depreciation   21,000       32,000        28,000    
       Shipping   15,000       32,000        42,000    

  Total territorial expenses   297,000       616,000        756,000    

  Territorial income (loss)
    before corporate expenses
  3,000       184,000        (56,000)   

  Corporate expenses:            
       Advertising (general)   15,000       40,000        35,000    
       General administrative   20,000       20,000        20,000    

  Total corporate expenses   35,000       60,000        55,000    

  Net operating income (loss) (32,000)    124,000      (111,000)   


    Cost of goods sold and shipping expenses are both variable; other costs are all fixed. Brabant NV purchases cheeses at auction and from farmers’ cooperatives, and it distributes them in the three territories listed above. Each of the three sales territories has its own manager and sales staff. The cheeses vary widely in profitability; some have a high margin and some have a low margin. (Certain cheeses, after having been aged for long periods, are the most expensive and carry the highest margins.)



Prepare a new segmented contribution format income statement for May. Show a Total column as well as data for each territory. In addition, for the company as a whole and for each sales territory, show each item on the segmented income statement as a percent of sales. (Note: % columns may not total due to rounding.) (Input all amounts as positive values except losses and their percentages which should be indicated by a minus sign. Round your percentage answers to 1 decimal place. Omit the "€" and "%" signs in your response.)

Solution Description

Please d

Ch 6 Q3.docx
Ch 6 Q3.docx