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	$	1,080,000		$	880,000		$	480,000
Variable expenses		176,000			126,000			76,000
Controllable fixed expenses		389,000			309,000			139,000
Fixed expenses controllable by others		206,000			176,000			66,000

  

In addition to the expenses listed above, the company has $110,000 of common fixed expenses. Income-tax expense for the year is $310,000.

  

Required:

Prepare a segmented income statement for Countywide Cable Services, Inc.

	SEGMENTED INCOME STATEMENTS: COUNTYWIDE CABLE SERVICES, INC. Segments of Company Countywide Cable Services Metro Suburban Outlying Segment contribution margin $0 $0 $0 $0 Profit margin controllable by segment manager $0 $0 $0 $0 Profit margin traceable to segment $0 $0 $0 $0 $0 $0

Answer 1

						Segments of the company
					Cable	Metro	Suburban	outlying
					Service
Service revenue					2,440,000	1,080,000	880,000	480,000	2,440,000
Variable expenses					378,000	176,000	126,000	76,000	378,000
Segement contribution margin					2,062,000	904,000	754,000	404,000	2,062,000
less:Fixed Expenses controllable by segment manger					837,000	389,000	309,000	139,000	837,000
profit margin controllable by segment manager					1,225,000	515,000	445,000	265,000	1,225,000
less:fixed expenses ,traceable to segment,but
controllable by others					448,000	206,000	176,000	66,000	448,000
profit margin traceable to the segment					777,000	309,000	269,000	199,000	777,000
less:common fixed expense					110,000
income before taxes					667,000
less:income tax expenses					310,000
Net income					357,000