Assignment Problem: Income Statements Segmented by Products
Clay Consulting Firm provides three types of client services in three health-care-related industries. The income statement for July is as follows:
Clay Consulting Firm Income Statement for Month of July
|
Sales
|
|
$900,000
|
|
Less variable costs
|
|
-650,000
|
|
Contribution margin
|
|
250,000
|
|
Less fixed expenses
|
|
|
|
Service
|
$70,000
|
|
|
Selling and administrative
|
-65,000
|
-135,000
|
|
Net income
|
|
$115,000
|
The sales, contribution margin ratios, and direct fixed expenses for the three types of services are as follows:
|
|
Hospitals
|
Physicians
|
Nursing Care
|
|
Sales
|
$350,000
|
$250,000
|
$300,000
|
|
Contribution margin ratio
|
25%
|
35%
|
25%
|
|
Direct fixed expenses of services
|
$20,000
|
$18,000
|
$16,000
|
|
Allocated common fixed service expenses
|
$1,000
|
$1,000
|
$1,500
|
Required: Prepare income statements segmented by client categories. Include a column for the entire firm in the statement.
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