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Michaels Company segments its income statement into its East and West Divisions. The company's overall sales, contribution margin ratio, and net operating income are $660,000, 58%, and $55,000, respectively. The West Division's contribution margin and contribution margin ratio are $155,000 and 70%, respectively. The East Division's segment margin is $70,000. The company has $59,000 of common fixed costs that cannot be traced to either division. Required: Prepare an income statement for Michaels Company that uses the contribution format and is segmented by divisions.
Assume that the division is using absorption costing and that the divisional manager is giben an annual bonus based on divisional operating income. If Mr Cavalas wants to maximize his division's operating income for the year,how many units should ..
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