Spiess Corporation has two major business segments--Apparel and Accessories. Dat

Question

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

Common fixed expenses totaled $286,000 and were allocated as follows: $94,000 to the Apparel business segment and $192,000 to the Accessories business segment.

Required:

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

Sales revenues, Apparel $ 707,000 Variable expenses, Apparel $ 398,000 Traceable fixed expenses, Apparel $ 176,000 Sales revenues, Accessories $ 858,000 Variable expenses, Accessories $ 522,000 Traceable fixed expenses, Accessories $ 151,000

Explanation / Answer

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

Total Apparel Accessories Sales revenue 1565000 707000 858000 Variable expense (920000) (398000) (522000) Contribution margin 645000 309000 336000 Less: Traceable fixed expense (327000) (176000) (151000) Segment margin 318000 133000 185000 Less: Common fixed expense (286000) Net operating income 32000

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