Problem - Income Statements Segmented by Products

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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.

Reference no: EM132451427

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