Question

Prepare a segmented income statement for Mike's Auto Center using the 2018 Actual results. Of the fixed expenses, the following can be traced to specific segments and comment on any areas that require further investigation.

	Oil	Brakes	Tires
Rent	20%	30%	30%
Utilities	10%	25%	35%
Depreciation	10%	25%	25%
Maintenance	5%	30%	30%

Amounts not assigned to segments are common expenses of the business

Actual $ 1,060,500 Budget 1,101,600 $ Sales COGS Tires 25 $ $ $ $ Material Labor Disposal Rent Utilities Supervision Depreciation Maintenance $ $ $ $ $ $ S $ S $ 475,250 224,680 35,000 42,000 22,000 50,000 50,000 12,000 910,930 149,570 511,020 233,325 35,190 42,000 24,000 50,000 50,000 7,000 952,535 149,065 Three Products - Oil Change, Brakes, Tires BUDGET Oil Brakes # of activities 6,120 1,530 Sales Price 200 Labor hours 0.35 2.00 Labor cost per hour 5 25 S 25 Material cost $ 6 S 70 Disposal cost $ 2 $ . $ $ $ 4.50 25 400 25 $ $ $ $ $ Total COGS Gross Profit ACTUAL Oil Brakes # of activities 7,000 1,400 Average Sales Price 24 210 Average Material Cost 7.25 65 Average Labor Hours 0.32 2.115 Average Labor Cost per hr 26 26 Average Disposal Cost 2.5 0 • Any rounding should be put in Tires Tires 800 748.12 416.88 4.3 26 21.88 SG&A Expenses Insurance Computer/Phone Office Supplies Advertising Total SG&A Expenses Operating Income $ 5 $ $ $ $ 12,000 3,250 2,800 6,000 24,050 125,520 $ $ $ $ $ $ 10,000 3,000 3,000 5,000 21,000 128,065

Answer 1

Date Total 10,60,500 592.500 408,000 2,94000 - Mike Auto Center Segment Income Statement Particular I oil Brakes Tires Segment Revenue 168,000 2,94000598,500 dear - Variable Cont Material 50.750 4 75,250 91,000. 333500 Labor Cost 58.240 76.986 89.454 2, 24, 680 Diaporal Cost 17,500 17,500 35,000 Rent ou 2400 12,600 12, 600 42,000 Vtilitin 2200 5500 o 67700 22,000 Subervision 1 - 50,000 Depreciation 5000 12.500 12,500 50.000 Maintenance 600 a 136.00. oe 36.00 12,000 1, 42,690 0.930 Total Variable o cost 2,02, 186 100 476 854 00 - 25 310 91,8 14 121,646 1, 49, 570 003 Contribution (Revenue - VC) SG&A Expens Insurance Computer office Suppliers Advertisement Total SG4A та Expe по COS HONOM 12000 3,250 2,800 6000 24,050 EC Operating Income 1, 25, 520