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Case 6-30 (75 minutes)
1. See the segmented statement on the second following page.
Supporting computations for the statement are given below:
Sales:
Membership dues (20,000 × $100) ..........................
$2,000,000
Assigned to Magazine Subscriptions Division
(20,000 × $20) ....................................................
400,000
Assigned to Membership Division .............................
$1,600,000
Non-member magazine subscriptions (2,500 × $30) .
$ 75,000
Reports and texts (28,000 × $25) ............................
$ 700,000
Continuing education courses:
One-day (2,400 × $75) .........................................
$ 180,000
Two-day (1,760 × $125) .......................................
220,000
Total revenue ..........................................................
$ 400,000
Salaries
Personnel Costs
(25% of Salaries)
Membership Division .....................
$210,000
$ 52,500
Magazine Subscriptions Division .....
150,000
37,500
Books and Reports Division ............
300,000
75,000
Continuing Education Division ........
180,000
45,000
Total assigned to divisions .............
840,000
210,000
Corporate staff ..............................
80,000
20,000
Total .............................................
$920,000
$230,000
Appendix 6A
Super-Variable Costing
Exercise 6A-1 (10 minutes)
1. a. The unit product cost under super-variable costing would include
direct materials of $18.
b. The super-variable costing income statement would be:
Sales (20,000 units × $50 per unit) ............
$1,000,000
Variable cost of goods sold
(20,000 units × $18 per unit) ...............
360,000
Contribution margin ..................................
640,000
Fixed expenses:
Direct labor ............................................
$200,000
Fixed manufacturing overhead ................
250,000
Fixed selling and administrative expense ..
80,000
530,000
Net operating income ................................
$ 110,000
