Countywide Cable Services, Inc. is organized with three segments: Metro, Suburba
ID: 2570510 • 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 $95,000 of common fixed expenses. Income-tax expense for the year is $295,000.
Required:
Prepare a segmented income statement for Countywide Cable Services, Inc.
Metro Suburban Outlying Service revenue $ 1,050,000 $ 850,000 $ 450,000 Variable expenses 170,000 120,000 70,000 Controllable fixed expenses 380,000 300,000 130,000 Fixed expenses controllable by others 200,000 170,000 60,000Explanation / Answer
SEGMENTED INCOME STATEMENTS: COUNTYWIDE CABLE SERVICES, INC. Segments of Company Countywide Cable Services Metro Suburban Outlying Service Revenue 2,350,000.00 1,050,000.00 850,000.00 450,000.00 Less: Variable Expenses 360,000.00 170,000.00 120,000.00 70,000.00 Segment contribution margin 1,990,000.00 880,000.00 730,000.00 380,000.00 Less: controllable fixed expenses 810,000.00 380,000.00 300,000.00 130,000.00 Profit margin controllable by segment manager 1,180,000.00 500,000.00 430,000.00 250,000.00 Less: Fixed expenses controllable by others 430,000.00 200,000.00 170,000.00 60,000.00 Profit margin traceable to segment 750,000.00 300,000.00 260,000.00 190,000.00 Less: common fixed expenses 95,000.00 EBIT 655,000.00 Less: Income Tax Expense 295,000.00 Net Income 360,000.00