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: Sales revenues, Apparel Variable expenses, Apparel Traceable fixed expenses, Apparel Sales revenues, Accessories Variable expenses, Accessories Traceable fixed expenses, Accessories $ 699,000 $ 367,000 $179,000 $ 795,000 $ 483,000 $ 145,000 Common fixed expenses totaled $231,000 and were allocated as follows: $89,000 to the Apparel business segment and $142,000 to the Accessories business segment. Required Prepare a segmented income statement in the contribution format for the company. Total CompanyApparel Accessories 0

Explanation / Answer

Prepare segmented income statement :

Total company Apparel Accessoriess Sales revenue 1494000 699000 795000 Less: Variable cost (850000) (367000) (483000) Contribution margin 644000 332000 312000 Less: Traceable fixed cost (324000) (179000) (145000) Segment margin 320000 153000 167000 Less: Common fixed expenses (231000) Net operating income 89000

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