Pratt Corporation has two major business segments-Apparel and Accessories. Data

Question

Pratt Corporation has two major business segments-Apparel and Accessories. Data concerning those segments for October appear below:

Common fixed expenses totaled $457,000 and were allocated as follows: $163,000 to the Apparel business segment and $294,000 to the Accessories business segment.

Prepare a segmented income statement in the contribution format for the company.

Common fixed expenses totaled $457,000 and were allocated as follows: $163,000 to the Apparel business segment and $294,000 to the Accessories business segment.

Explanation / Answer

Total Apparel Accessories Company Sales 1623000 774000 849000 Variable Expenses 860000 340000 520000 Contribution 763000 434000 329000 Fixed Costs Traceable Fixed Cost 276000 174000 102000 Common Fixed Cost 457000 163000 294000 Total Fixed Cost 733000 337000 396000 Net Income 30000 97000 -67000

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