The American Association of Acupuncturists is a professional association for acu
ID: 2778061 • Letter: T
Question
The American Association of Acupuncturists is a professional association for acupuncturists that has 10,400 members. The association operates from a central headquarters but has local chapters throughout North America. The association’s monthly journal, American Acupuncture, features recent developments in the field. The association also publishes special reports and books, and it sponsors courses that qualify members for the continuing professional education credit required by state certification boards. The association’s statement of revenues and expenses for the current year is presented below:
American Association of Acupuncturists
Statement of Revenues and Expenses
For the Year Ended December 31
Revenues
$
1,129,400
Expenses:
Salaries
410,000
Occupancy costs
114,000
Distributions to local chapters
204,000
Printing
84,000
Mailing
22,000
Continuing education instructors' fees
54,000
General and administrative
28,000
Total expenses
916,000
Excess of revenues over expenses
$
213,400
The board of directors of the association has requested that you construct a segmented income
statement that shows the financial contribution of each of the association's four major programs— membership service, journal, books and reports, and continuing education. The following data have been gathered to aid you:
a.
Membership dues are $70 per year, of which $15 covers a one-year subscription to the association's journal. The other $55 pays for general membership services.
b.
One-year subscriptions to American Acupuncture are sold to nonmembers and libraries at $22 per subscription. A total of 1,200 of these subscriptions were sold last year. In addition to subscriptions, the journal generated $59,000 in advertising revenues. The costs per journal subscription, for members as well as nonmembers, were $3 for printing and $1 for mailing.
c.
A variety of technical reports and professional books were sold for a total of $79,000 during the year. Printing costs for these materials totaled $24,000, and mailing costs totaled $7,900.
d.
The association offers a number of continuing education courses. The courses generated revenues of $237,000 last year.
e.
Salary costs and space occupied by each program and the central staff are as follows:
Salaries
Space Occupied (square feet)
Membership services
$
162,000
3,000
Journal
53,000
1,000
Books and reports
31,000
1,000
Continuing education
48,000
2,000
Central staff
116,000
3,000
Total
$
410,000
10,000
f.
The $114,000 in occupancy costs incurred last year includes $23,000 in rental cost for a portion of the warehouse used by the Membership Services program for storage purposes. The association has a flexible rental agreement that allows it to pay rent only on the warehouse space it uses.
g.
Printing costs other than for journal subscriptions and for books and reports related to Continuing Education.
h.
Distributions to local chapters are for general membership services.
i.
General and administrative expenses include costs relating to overall administration of the association as a whole. The association’s central staff does some mailing of materials for general administrative purposes.
j.
The expenses that can be traced or assigned to the central staff, as well as any other expenses that are not traceable to the programs, will be treated as common costs. It is not necessary to distinguish between variable and fixed costs.
Required:
1.
Prepare a contribution format segmented income statement for the American Association of Acupuncturists for last year. This statement should show the segment margin for each program as well as results for the association as a whole. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values except losses which should be indicated by a minus sign. )
The American Association of Acupuncturists is a professional association for acupuncturists that has 10,400 members. The association operates from a central headquarters but has local chapters throughout North America. The association’s monthly journal, American Acupuncture, features recent developments in the field. The association also publishes special reports and books, and it sponsors courses that qualify members for the continuing professional education credit required by state certification boards. The association’s statement of revenues and expenses for the current year is presented below:
Explanation / Answer
American Assosiation of Accupuncturist Statement of segmented Revenue & Cost For the year ended Dec31. All data in $ Details Consolidated Membership Div Magazine Subscription Div Books & Reports Continuing Education Corporate/Common cost Total Revenue 1,129,400 Segments Membership 572,000 182,400 Subscription Teachers Forum Magazine Advertisement in Magazine 59,000 Technical reports & professional text 79,000 Continuing Education courses 237,000 Segment wise revenue 572,000 241,400 79,000 237,000 1,129,400 Costs Printing & Paper 34,800 24,000 25,200 84,000 Mailing 11,600 7,900 2,500 22,000 Salaries 162,000 53,000 31,000 48,000 116,000 410,000 Personeel Cost - Occupancy cost 34,200 11,400 11,400 22,800 34,200 114,000 Distribution to local chapters 204,000 204,000 Other membership services - Instructors service fees 54,000 54,000 General & Admin 28,000 28,000 Total Costs 400,200 110,800 74,300 150,000 180,700 916,000 Segment wise Margin contribution (excluding common costs) 171,800 130,600 4,700 87,000 394,100 Less Common Costs (180,700) Net Income of association as a whole 213,400
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.