Question
Need to create a spreadsheet County Cable Services Inc. is organized in three segments: Metro, Suburban, and Outlying. Data for the company and for these
Need to create a spreadsheet
County Cable Services Inc. is organized in three segments: Metro, Suburban, and Outlying. Data for the company and for these segments follow. (10 Points)
Segments of Company | ||||||||
Cable Service Inc | Metro | Suburban | Outlying | |||||
Service Revenue | $500 | $400 | $200 | |||||
Less: Variable Cost | 225 | |||||||
Segment Contribution Margin | ||||||||
Less: Controllable Fixed Cost | 200 | 160 | 75 | |||||
Controllable profit margin | 440 | 200 | 75 | |||||
Less: Noncontrollable fixed Cost | 100 | |||||||
Segment profit margin | 180 | 85 | 30 | |||||
Less: Common fixed costs | ||||||||
Income befores taxes | ||||||||
Less: Income tax expense | 75 | |||||||
Net Income | $55 |
Variable costs as a percentage of service revenue are: Metro, 20%; Suburban, 18.75%; and Outlying, 25%
A. Complete the segmented income statement for County Cable. (Note that in some of the columns you have part of the information and can back solve the missing parts.)
B. Evaluate and rank the three segment managers for consideration of a pay raise. Base the managers' performance on (1) absolute dollars of the appropriate profit measure (please identify which that is from the several possible lines that are measured), and (2) the appropriate profit measure as a percentage of service revenue. What causes any difference in rankings between the two approaches?
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