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 $312,000 and were allocated as follows: $148,000 to the Apparel business segment and $164,000 to the Accessories business segment.

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

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

Explanation / Answer

Segmented income statement

Particulars. Appalearal. Accessories. Total

Sales. 686,000. 801,000. 1,487,000

Less:variable. 316,000. 488000. 804000

Contribution. 370,000. 313,000. 683,000

Fixed cost

-direct 185,000. 170,000. 355,000

-common 148,000. 164,000. 312,000

Profit. 37,000. (21000). 16000

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