Refer to the data in Exercise AH 6-3. Assume Annie's Homemade divides its total mobile sales into three segments. The Corporate Subscriptions segment, which accounts for 20% of mobile sales and has a variable expense ratio of 47.6%, refers to companies that purchase ice cream for their employees one day a month, every month of the year. The Food Truck segment, which accounts for 28% of mobile sales and has a variable expense ratio of 42.0%, includes selling ice cream at festivals, private venues, and local microbreweries. The Catered Events segment, which accounts for 52% of mobile sales and has a variable expense ratio of 36.0%, includes pre-purchased ice cream deliveries for weddings, birthday parties, graduation parties, etc. All of the mobile sales' fixed expenses are common fixed expenses that could only be avoided by discontinuing all mobile sales. Required: 1. Prepare a contribution format segmented income statement that divides Annie's Homemade's mobile sales into three segments: Corporate Subscriptions, Food Truck, and Catered Events. 2. If the Food Truck segment's unit sales grow by 20% and all else holds constant, then what would be the impact on profits (rounded to the nearest dollar)? 3. If the total mobile sales hold constant, but sales of Corporate Subscriptions decrease by $10,000 and sales at Catered Events increase by $10,000, then what would be the impact on profits? Complete this question by entering your answers in the tabs below. Requirement 1 Requirement 2 Requirement 3 Prepare a contribution format segmented income statement that divides Annie's Homemade's mobile sales into three segments: Corporate Subscriptions, Food Truck, and Catered Events. Sales Variable expenses Contribution margin Traceable fixed expenses $ Mobile 227,500 91,000 136,500 15,000 Corporate Subscriptions 0 Food Truck 0 Catered Events 0
Refer to the data in Exercise AH 6-3. Assume Annie's Homemade divides its total mobile sales into three segments. The Corporate Subscriptions segment, which accounts for 20% of mobile sales and has a variable expense ratio of 47.6%, refers to companies that purchase ice cream for their employees one day a month, every month of the year. The Food Truck segment, which accounts for 28% of mobile sales and has a variable expense ratio of 42.0%, includes selling ice cream at festivals, private venues, and local microbreweries. The Catered Events segment, which accounts for 52% of mobile sales and has a variable expense ratio of 36.0%, includes pre-purchased ice cream deliveries for weddings, birthday parties, graduation parties, etc. All of the mobile sales' fixed expenses are common fixed expenses that could only be avoided by discontinuing all mobile sales. Required: 1. Prepare a contribution format segmented income statement that divides Annie's Homemade's mobile sales into three segments: Corporate Subscriptions, Food Truck, and Catered Events. 2. If the Food Truck segment's unit sales grow by 20% and all else holds constant, then what would be the impact on profits (rounded to the nearest dollar)? 3. If the total mobile sales hold constant, but sales of Corporate Subscriptions decrease by $10,000 and sales at Catered Events increase by $10,000, then what would be the impact on profits? Complete this question by entering your answers in the tabs below. Requirement 1 Requirement 2 Requirement 3 Prepare a contribution format segmented income statement that divides Annie's Homemade's mobile sales into three segments: Corporate Subscriptions, Food Truck, and Catered Events. Sales Variable expenses Contribution margin Traceable fixed expenses $ Mobile 227,500 91,000 136,500 15,000 Corporate Subscriptions 0 Food Truck 0 Catered Events 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
sssss
Transcribed Image Text:Refer to the data in Exercise AH 6-3. Assume Annie's Homemade divides its total mobile sales into three segments. The
Corporate Subscriptions segment, which accounts for 20% of mobile sales and has a variable expense ratio of 47.6%,
refers to companies that purchase ice cream for their employees one day a month, every month of the year. The Food
Truck segment, which accounts for 28% of mobile sales and has a variable expense ratio of 42.0%, includes selling ice
cream at festivals, private venues, and local microbreweries. The Catered Events segment, which accounts for 52% of
mobile sales and has a variable expense ratio of 36.0%, includes pre-purchased ice cream deliveries for weddings,
birthday parties, graduation parties, etc. All of the mobile sales' fixed expenses are common fixed expenses that could
only be avoided by discontinuing all mobile sales.
Required:
1. Prepare a contribution format segmented income statement that divides Annie's Homemade's mobile sales into three segments:
Corporate Subscriptions, Food Truck, and Catered Events.
2. If the Food Truck segment's unit sales grow by 20% and all else holds constant, then what would be the impact on profits (rounded
to the nearest dollar)?
3. If the total mobile sales hold constant, but sales of Corporate Subscriptions decrease by $10,000 and sales at Catered Events
increase by $10,000, then what would be the impact on profits?
Complete this question by entering your answers in the tabs below.
Requirement 1 Requirement 2 Requirement 3
Prepare a contribution format segmented income statement that divides Annie's Homemade's mobile sales into three
segments: Corporate Subscriptions, Food Truck, and Catered Events.
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
$
Mobile
227,500
91,000
136,500
15,000
Corporate
Subscriptions
0
Food Truck
0
Catered Events
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 6 images
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education