Flash in a Flash sells three types of digital memory devices: Secure Digital (SD), CompactFlash (CF), and

Memory Sticks (MS). The following table reveals average per unit selling price, average per unit variable

product cost, and the number of units sold during a recent period:

Selling Price Variable Product Cost Units Sold

	Selling Price	Variable Product Cost	Units Sold
SD	24	16	220,000
CF	21	11	170,000
MS	38	31	370,000

Each product is managed by a product manager who is compensated with a fixed salary, as follows:

SD $170,000

CF $185,000

MS $170,000

The product managers are each authorized to engage a sales strategy. SD's strategy is to rely exclusively on a manufacturer representative. The manufacturer representative is paid 10% of sales. CF's strategy is to utilize a salaried sales manager and print media advertising campaign at a fixed cost of $240,000. MS's strategy is use an internet site at a fixed cost of $230,000, plus $0.20 per click. The click rate is 30 times the number of units sold.

Of the above costs, the product manager's salary is considered to be an uncontrollable fixed cost for each

unit. The only other costs are general and administrative costs incurred at the corporate level. These costs of $280,000 are not traced to any particular product.

(a) Prepare a contribution income statement for each segment, revealing the segment margin.

(b) Prepare a "company total" contribution income statement for all three segments.

(c) Evaluate Flash in a Flash's results, and comment as to why corporate management should look at segmented results in addition to overall corporate performance.