Music Teachers, Incorporated, is an educational association for music teachers that has 19,600 members. The association operates from a central headquarters but has local membership chapters throughout the United States. Monthly meetings are held by the local chapters to discuss recent developments on topics of interest to music teachers. The associations magazine, Teachers Forum, is issued monthly with features about recent developments in the field. The association publishes books and reports and also sponsors professional courses that qualify for continuing professional education credit. The associations statement of revenues and expenses for the current year is presented below.

Music Teachers, Incorporated Statement of Revenues and Expenses For the Year Ended November 30
Revenues	$ 3,275,500
Expenses:
Salaries	994,000
Personnel costs	248,500
Occupancy costs	220,000
Reimbursement of member costs to local chapters	570,000
Other membership services	550,000
Printing and paper	342,000
Postage and shipping	183,000
Instructors fees	74,000
General and administrative	35,000
Total expenses	3,216,500
Excess of revenues over expenses	$ 59,000

The board of directors of Music Teachers, Incorporated, has requested that a segmented income statement be prepared showing the contribution of each segment to the association. The association has four segments: Membership Division, Magazine Subscriptions Division, Books and Reports Division, and Continuing Education Division. Mike Doyle has been assigned responsibility for preparing the segmented income statement, and he has gathered the following data:

The 19,600 members of the association pay dues of $100 per year, of which $20 covers a one-year subscription to the Teachers Forum. Other benefits include membership in the association and chapter affiliation. The portion of the dues covering the magazine subscription ($20) should be assigned to the Magazine Subscriptions Division.

A total of 3,200 one-year subscriptions to Teachers Forum were also sold last year to nonmembers and libraries at $30 per subscription. In addition to subscriptions, the journal generated $102,000 in advertising revenues.

The costs to produce the Teachers Forum magazine included $8 per subscription for printing and paper and $4 per subscription for postage and shipping.

A total of 28,100 technical reports and professional texts were sold by the Books and Reports Division at an average selling price per unit of $25. Average costs per publication were $4 for printing and paper and $2 for postage and shipping.

The association offers a variety of continuing education courses to both members and nonmembers. The one-day courses had a tuition cost of $75 each and were attended by 2,600 students. A total of 1,760 students took two-day courses at a tuition cost of $125 for each student. Outside instructors were paid to teach some courses.

Salary costs and space occupied by division follow:

	Salaries	Space Occupied (square feet)
Membership	$ 228,000	3,000
Magazine Subscriptions	159,000	1,000
Books and Reports	338,000	1,000
Continuing Education	188,000	2,000
Corporate staff	81,000	3,000
Total	$ 994,000	10,000

Personnel costs are 25% of salaries in the separate divisions as well as for the corporate staff. The $220,000 in occupancy costs (which can be allocated to segments based on their square feet occupied) includes $56,000 in rental cost for a warehouse used by the Books and Reports Division for storage purposes. Assume that this cost could be avoided if the division were eliminated.

Printing and paper costs other than for magazine subscriptions and for books and reports relate to the Continuing Education Division.

General and administrative expenses include costs relating to overall administration of the association as a whole. The companys corporate staff does some mailing of materials for general administrative purposes.

The expenses that can be traced or assigned to the corporate staff, as well as any other expenses that are not traceable to the segments, will be treated as common costs. It is not necessary to distinguish between variable and fixed costs.

Required:

1. Prepare a segmented income statement for Music Teachers, Incorporated. This statement should show the segment margin for each division as well as results for the association as a whole.