Simpson Enterprises provides computer maintenance services to a broad range of customers, from local schools to small
Question:
Simpson Enterprises provides computer maintenance services to a broad range of customers, from local schools to small businesses to residential customers. It obtains the following information about the costs to maintain these segments.
REQUIRED:
a. Compute the segment profitability in dollars and percentages for each segment.
b. Based on these results, which segment is best for Simpson to serve? Which is worst?
Transcribed Image Text:
Simpson Enterprises Schools Small Businesses Residential Company Total Revenues $750,000 $1,250,000 $500,000 $2,500,000 Less: Direct labor costs $360,000 $562,500 $255,000 $1,177,500 Computer equipment costs $125,000 $200,000 $75,000 $400,000 Customer service costs $50,000 $125,000 $75,000 $250,000 Travel costs $20,000 $30,000 $50,000 $100,000 Entertainment costs $- $25,000 $- $25,000 General overhead costs $90,000 $125,000 $75,000 $290,000
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a To compute the segment profitability in dollars and percentages for each segment we need to subtract the total costs for each segment from its revenues Schools Revenues 750000 Total costs 562500 200...View the full answer
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Managerial Accounting An Integrative Approach
ISBN: 9780999500491
2nd Edition
Authors: C J Mcnair Connoly, Kenneth Merchant
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