Comment on the profitability of the Mike's Auto Center segments and identify any areas that require further investigation. Please explain your rationale.

Of the fixed expenses, the following can be traced to specific segments: Oil Brakes Tires Rent 20% 30% 30% Utilities 10% 25% 35% Depreciation 10% 25% 25% Maintenance 30% 30% 5% Tires 598496 333504 89440 17504 Amounts not assigned to segments are common expenses of the b Sales revenue 1060496 168000 294000 Less: Variable Cost Material 475254 50750 91000 Labor Cost 224666 58240 76986 Disposal Cost 35004 17500 0 Rent 42,000 $ Utilities 22,000 $ Supervision 50,000 Depreciation $ 50,000 $ Maintenance 12,000 $ Total Variable Cost 910924 126490 167986 $ 4 4 4 44 4 44 44 44 44 440448 Contribution (Revenue 149572 41510 126014 158048 SG&A Expenses Insurance Computer/Phone Office Supplies Advertising Total SG&A Expenses 44 44 44 12,000 3,250 2,800 6,000 24,050 Operating Income $ 125,522