Music teachers, Inc., is an educational association for music teachers that has 20000 members. The association operates from a central headquarters but has local membership chapters throughout the United States. Monthly meetings are held by the local chapters to discuss recent developments on topics of interest to music teachers. The association’s magazine, teachers’ Forum, is issued monthly with features about recent developments in the field. The association publishes books and report and also sponsors professional courses that quality for continuing professional education credit. The association’s statement of revenues and expenses for the current year is presented below. The board of Directors of Music Teachers, Inc., has requested that a segmented income statement be prepares showing the contribution of each other segment to the association. The association has four segments: Membership Division, Magazine Subscriptions Division, Books and Reports Division, and Continuing Education Division. Mike Doyle has been assigned responsibility for preparing the segmented income statement, and has gathered the following data: Music Teachers, Inc. Statement of Revenue and Expenses For the Year Ended November 30 Revenues $ 3,275,000 Expenses Salaries 920,000 Personnel costs 230,000 Occupancy costs 280,000 Reinbursement of member cosnts to local chapters 600,000 Other membership services 500,000 printing paper 320,000 postage and paper 1,760,000 Intructors's fees 80,000 General and administraive 38,000 Total expenses 3,144,000 Excess of revenues obver expenses $ 131,000 The 20,000 members of the association pay dues of $100 per year, of covers a one-year subscription to the teacher’ forum. Other benefits include membership in the association and chapter affiliation. The portion of the dues covering the magazine subscription ($20) should be assigned to the Magazine Subscription Division. A total 2,500 one-year subscription to Teachers’ forum were also sold last year to nonmembers and libraries at $30 per subscription. In additions to subscriptions, the journal generated $100,000 in advertising revenues. The cost to produce the teachers’ forum magazine included $7 per subscription for printing and paper and $4 per subscription for postage and shipping. A total 28,000 technical reports and professional texts were sold by Books and Reports Division at an average selling price per unit of $25. Average costs per publication were $4 for printing and paper and $2 for postage and shipping The association offers a variety of continuing education courses had a tuition cost of $75 each and were attended by 2,400 students. Outside instructors were paid to teach some courses. Salary costs and space occupied by division follow: Space Occupied Salaries Square feet Membership $ 210,000 2,000 Magazine Subscriptions 150,000 2,000 Books and Reports 300,000 3,000 Continuing Education 180,000 2,000 Corporate staff 80,000 1,000 Total $ 920,000 10,000 Personnel costs are 25% of the salaries in the separate division =s as well as for the corporate staff. The $280,000 in occupancy costs included $50,000 in rental cost for a warehouse used by Books and Reported Division for storage purposes. Printing and paper costs other than for magazine subscriptions and for books and report relate to the Continuing Education Division. General and administrative expenses include costs relating to overall administration of the association as a whole. The company’s corporate staff does some mailing of materials for general administrative purposes. The expenses that can be traced or assigned to the corporate staff, as well as any other expenses that are not traceable to the segments, will be treated as common costs. It is not necessary to distinguish between variable and fixed costs. Required Prepare a segmented income statement for Music Teachers, Inc. This statement should show the segment margin for each division as well as results for the association as a whole Give arguments for and against allocating all costs of the association to the four divisions.

Music teachers, Inc., is an educational association for music teachers that has 20000 members. The association operates from a central headquarters but has local membership chapters throughout the United States. Monthly meetings are held by the local chapters to discuss recent developments on topics of interest to music teachers. The association’s magazine, teachers’ Forum, is issued monthly with features about recent developments in the field. The association publishes books and report and also sponsors professional courses that quality for continuing professional education credit. The association’s statement of revenues and expenses for the current year is presented below. The board of Directors of Music Teachers, Inc., has requested that a segmented income statement be prepares showing the contribution of each other segment to the association. The association has four segments: Membership Division, Magazine Subscriptions Division, Books and Reports Division, and Continuing Education Division. Mike Doyle has been assigned responsibility for preparing the segmented income statement, and has gathered the following data: Music Teachers, Inc. Statement of Revenue and Expenses For the Year Ended November 30 Revenues $ 3,275,000 Expenses Salaries 920,000 Personnel costs 230,000 Occupancy costs 280,000 Reinbursement of member cosnts to local chapters 600,000 Other membership services 500,000 printing paper 320,000 postage and paper 1,760,000 Intructors's fees 80,000 General and administraive 38,000 Total expenses 3,144,000 Excess of revenues obver expenses $ 131,000 The 20,000 members of the association pay dues of $100 per year, of covers a one-year subscription to the teacher’ forum. Other benefits include membership in the association and chapter affiliation. The portion of the dues covering the magazine subscription ($20) should be assigned to the Magazine Subscription Division. A total 2,500 one-year subscription to Teachers’ forum were also sold last year to nonmembers and libraries at $30 per subscription. In additions to subscriptions, the journal generated $100,000 in advertising revenues. The cost to produce the teachers’ forum magazine included $7 per subscription for printing and paper and $4 per subscription for postage and shipping. A total 28,000 technical reports and professional texts were sold by Books and Reports Division at an average selling price per unit of $25. Average costs per publication were $4 for printing and paper and $2 for postage and shipping The association offers a variety of continuing education courses had a tuition cost of $75 each and were attended by 2,400 students. Outside instructors were paid to teach some courses. Salary costs and space occupied by division follow: Space Occupied Salaries Square feet Membership $ 210,000 2,000 Magazine Subscriptions 150,000 2,000 Books and Reports 300,000 3,000 Continuing Education 180,000 2,000 Corporate staff 80,000 1,000 Total $ 920,000 10,000 Personnel costs are 25% of the salaries in the separate division =s as well as for the corporate staff. The $280,000 in occupancy costs included $50,000 in rental cost for a warehouse used by Books and Reported Division for storage purposes. Printing and paper costs other than for magazine subscriptions and for books and report relate to the Continuing Education Division. General and administrative expenses include costs relating to overall administration of the association as a whole. The company’s corporate staff does some mailing of materials for general administrative purposes. The expenses that can be traced or assigned to the corporate staff, as well as any other expenses that are not traceable to the segments, will be treated as common costs. It is not necessary to distinguish between variable and fixed costs. Required Prepare a segmented income statement for Music Teachers, Inc. This statement should show the segment margin for each division as well as results for the association as a whole Give arguments for and against allocating all costs of the association to the four divisions.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The board of Directors of Music Teachers, Inc., has requested that a segmented income statement be prepares showing the contribution of each other segment to the association. The association has four segments: Membership Division, Magazine Subscriptions Division, Books and Reports Division, and Continuing Education Division. Mike Doyle has been assigned responsibility for preparing the segmented income statement, and has gathered the following data:

Music Teachers, Inc.
Statement of Revenue and Expenses
For the Year Ended November 30
Revenues	$ 3,275,000
Expenses
Salaries	920,000
Personnel costs	230,000
Occupancy costs	280,000
Reinbursement of member cosnts to local chapters	600,000
Other membership services	500,000
printing paper	320,000
postage and paper	1,760,000
Intructors's fees	80,000
General and administraive	38,000
Total expenses	3,144,000
Excess of revenues obver expenses	$ 131,000

The 20,000 members of the association pay dues of $100 per year, of covers a one-year subscription to the teacher’ forum. Other benefits include membership in the association and chapter affiliation. The portion of the dues covering the magazine subscription ($20) should be assigned to the Magazine Subscription Division.
A total 2,500 one-year subscription to Teachers’ forum were also sold last year to nonmembers and libraries at $30 per subscription. In additions to subscriptions, the journal generated $100,000 in advertising revenues.
The cost to produce the teachers’ forum magazine included $7 per subscription for printing and paper and $4 per subscription for postage and shipping.
A total 28,000 technical reports and professional texts were sold by Books and Reports Division at an average selling price per unit of $25. Average costs per publication were $4 for printing and paper and $2 for postage and shipping
The association offers a variety of continuing education courses had a tuition cost of $75 each and were attended by 2,400 students. Outside instructors were paid to teach some courses.
Salary costs and space occupied by division follow:

		Space Occupied
	Salaries	Square feet
Membership	$ 210,000	2,000
Magazine Subscriptions	150,000	2,000
Books and Reports	300,000	3,000
Continuing Education	180,000	2,000
Corporate staff	80,000	1,000
Total	$ 920,000	10,000

Personnel costs are 25% of the salaries in the separate division =s as well as for the corporate staff. The $280,000 in occupancy costs included $50,000 in rental cost for a warehouse used by Books and Reported Division for storage purposes.
Printing and paper costs other than for magazine subscriptions and for books and report relate to the Continuing Education Division.
General and administrative expenses include costs relating to overall administration of the association as a whole. The company’s corporate staff does some mailing of materials for general administrative purposes.

The expenses that can be traced or assigned to the corporate staff, as well as any other expenses that are not traceable to the segments, will be treated as common costs. It is not necessary to distinguish between variable and fixed costs.

Required

Prepare a segmented income statement for Music Teachers, Inc. This statement should show the segment margin for each division as well as results for the association as a whole
Give arguments for and against allocating all costs of the association to the four divisions.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.