Segment Reporting and Analysis Business Book Publishers, Inc. has prepared income statements segmented by divisions, but management is still uncertain about actual performance. Financial information for May is given as follows:

	Textbook
	Division
Sales	$180,000
Less variable expenses
Manufacturing	28,800	184,500	213,300
Selling and administrative	9,000	18,450	27,450
Total	37,800	202,950	240,750
Contribution margin	142,200	166,050	308,250
Less direct fixed expenses	18,000	180,000	198,000
Net income (loss)	$124,200	$-13,950	$110,250

Management is concerned about the Professional Division and requests additional analysis. Additional information regarding May operations of the Professional Division is as follows:

	Professional Division
	Accounting	Executive	Management
	Books	Books	Books
	Segment	Segment	Segment
Sales	$126,000	$126,000	$117,000
Variable manufacturing expenses as a percentage of sales	60%	40%	50%
Other variable expenses as a percentage of sales	5%	5%	5%
Direct fixed expenses	$45,000	$66,120	$45,000
Allocated common fixed expenses	$3,600	$1,800	$5,400

The professional accounting books are sold to auditors and controllers. The current information on these markets is as follows:

	Accounting Books Segment
	Auditors Market	Controllers Market	Total
Sales	$27,000	$99,000	$126,000
Variable manufacturing expenses as a percentage of sales	60%	60%
Other variable expenses as a percentage of sales	5%	5%
Direct fixed expenses	$13,500	$27,000	$40,500
Allocated common fixed expenses	$1,350	$1,800	$3,150

Required a. Prepare an income statement segmented by product for the Professional Division. Include a column for the division as a whole. Note: Do not use a negative sign with your answers with the exception of a negative product margin or a division loss which should have a negative sign.

Business Books Publishers Inc.
Professional Division: Segment and Divisional Income Statements
For the Month of May
	Accounting	Executive	Management	Professional Division
Sales	Answer	Answer	Answer	Answer
Variable manufacturing	Answer	Answer	Answer	Answer
Manufacturing margin	Answer	Answer	Answer	Answer
Other variable expenses	Answer	Answer	Answer	Answer
Contribution margin	Answer	Answer	Answer	Answer
Total direct costs :
Direct fixed expenses	Answer	Answer	Answer	Answer
Allocated common fixed expense	Answer	Answer	Answer	Answer
Total	Answer	Answer	Answer	Answer
Product margin	Answer	Answer	Answer	Answer
Unallocated common fixed expenses				Answer
Professional division income (loss)				Answer

b. Prepare an income statement segmented by market for the Accounting Books Segment of the Professional Division. Note: Do not use a negative sign with your answers with the exception of a negative market margin, a market loss, or an accounting market loss which should have a negative sign.

Business Books Publishers Inc.
Professional Division
Market Income Statements: Accounting Books Segment
For the Month of May
	Auditors	Controllers
Accounting Books Segment	Market	Market	Total
Sales	Answer	Answer	Answer
Variable manufacturing	Answer	Answer	Answer
Manufacturing margin	Answer	Answer	Answer
Other variable expenses	Answer	Answer	Answer
Contribution margin	Answer	Answer	Answer
Direct fixed expenses	Answer	Answer	Answer
Market margin	Answer	Answer	Answer
Allocated common fixed expenses	Answer	Answer	Answer
Market income (loss)	Answer	Answer	Answer
Unallocated common fixed expenses			Answer
Accounting market income (loss)			Answer

c. Evaluate which Accounting Books Segment the Professional Division should keep or discontinue in the short run. Auditors Market Controllers Market