Exercise 12-33 Part 1 Revised Countrywide Cable Services, Inc. is organized with

Question

Exercise 12-33 Part 1 Revised Countrywide 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 ` 800,000 900,000 400,000 Variable expenses 300,000 200,000 200,000 Controllable fixed expenses 300,000 340,000 80,000 Fixed expenses controllable by others 180,000 180,000 40,000 In addition to the expenses listed above, the company had $70,000 of common fixed expenses. Income-tax expense for the year is $110,000. Required: 1. Prepare a segmented income statement for Countrywide Cable Services, Inc. Use the contribution format.

Explanation / Answer

Countrywide Cable Metro Suburban Outlying Service revenue 2100000 800000 900000 400000 Variable Expenses 700000 300000 200000 200000 Segment Contribution Margin 1400000 500000 700000 200000 Less: Controllable Fixed Expenses 720000 300000 340000 80000 Controllable Profit Margin 680000 200000 360000 120000 Less: Fixed expenses, traceable to segment, but controllable by others 400000 180000 180000 40000 Profit margin traceable to the segment 280000 20000 180000 80000 Less: Common fixed expenses 70000 Income before taxes 210000 Less: Income tax expenses 110000 Net Income 100000

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