Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Guide To Audit Data Analytics

Authors: AICPA

1st Edition

1945498641, 978-1945498640

More Books

Students also viewed these Accounting questions

Question

What are task patterns, and how can you recognize them?

Answered: 1 week ago

Question

2. DO change any clerical or calculation errors.

Answered: 1 week ago