Income Statements Segmented by Products Clay Consulting Firm provides three type
ID: 2478243 • Letter: I
Question
Income Statements Segmented by Products
Clay Consulting Firm provides three types of client services in three health-care-related industries. The income statement for July is as follows:
The sales, contribution margin ratios, and direct fixed expenses for the three types of services are as follows:
Prepare income statements segmented by client categories. Include a column for the entire firm in the statement.
Use negative signs with all answers relating to expenses and costs.
Clay Consulting FirmIncome Statement
For Month of July Sales $900,000 Less variable costs (606,000) Contribution margin 294,000 Less fixed expenses Service $70,000 Selling and administrative 65,000 (135,000) Net income $159,000
Explanation / Answer
Hospitals Physicians Nursing Care Total Sales $360,000 $240,000 $300,000 $900,000 variable cost $252,000 $144,000 $210,000 $606,000 Contribution margin $108,000 $96,000 $90,000 $294,000 Direct fixed expenses of services $24,000 $19,000 $15,000 $58,000 prodcut margin $84,000 $77,000 $75,000 $236,000 Allocated common fixed service expenses $1,000 $1,000 $1,500 $3,500 product income $83,000 $76,000 $73,500 $232,500 unallocated exp service 8500 selling 65000 total 73500 net income $159,000