Countywide Cable Services, Inc. is organized with three segments: Metro, Suburba
ID: 2515943 • Letter: C
Question
Countywide Cable Services, Inc. is organized with three segments: Metro, Suburban, and Outlying. Data for these segments for the year just ended follow.
In addition to the expenses listed above, the company has $130,000 of common fixed expenses. Income-tax expense for the year is $330,000.
Required:
Prepare a segmented income statement for Countywide Cable Services, Inc.
Metro Suburban Outlying Service revenue $ 1,120,000 $ 920,000 $ 520,000 Variable expenses 184,000 134,000 84,000 Controllable fixed expenses 401,000 321,000 151,000 Fixed expenses controllable by others 214,000 184,000 74,000Explanation / Answer
Answer:
Segmented Income Statement
County Wide
Segments
Services
Metro
Suburban
Outlying
Service revenue
2560000
1120000
920000
520000
Variable expenses
402000
184000
134000
84000
Segment Contribution Margin
2158000
936000
786000
436000
Fixed expenses controllable by segment
873000
401000
321000
151000
Profit margin control by segment
1285000
535000
465000
285000
Fixed expenses controllable by others
472000
214000
184000
74000
Profit margin traceable to segment
813000
321000
281000
211000
Common Fixed Exp
130,000
IBT
683,000
Income Tax Exp
330,000
Net Income
353,000
Segmented Income Statement
County Wide
Segments
Services
Metro
Suburban
Outlying
Service revenue
2560000
1120000
920000
520000
Variable expenses
402000
184000
134000
84000
Segment Contribution Margin
2158000
936000
786000
436000
Fixed expenses controllable by segment
873000
401000
321000
151000
Profit margin control by segment
1285000
535000
465000
285000
Fixed expenses controllable by others
472000
214000
184000
74000
Profit margin traceable to segment
813000
321000
281000
211000
Common Fixed Exp
130,000
IBT
683,000
Income Tax Exp
330,000
Net Income
353,000