Question

Countywide Cable Services, Inc. is organized with three segments: Metro, Suburban, and Outlying. Data for these segments for the year just ended follow.

  

	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			74,000

  

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.

Answer 1

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