Question

Music Teachers, Inc., is an educational association for music teachers that has 19,600 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 reports and also sponsors professional courses that qualify for continuing professional education credit. The association's statement of revenues and expenses for the current year is presented below. Music Teachers, Inc. Statement of Revenues and Expenses For the Year Ended November 30 $3,297, 300 Revenues Expenses: Salaries 944,eee 236,eee 203,eee 588, ee0 55e, 0ee 329,eee Personnel costs Occupancy costs Reimbursement of member costs to local chapters Other membership services Printing and paper Postage and shipping Instructors fees General and adninistrative Total expenses 159,eee 76,e00 33,000 3,110,000 $ 187, 380 Excess of revenues over expenses The board of directors of Music Teachers, Inc... has requested that a segmented income statement be prepared showing the contribution of each 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 he has gathered the following dato a. The 19,600 members of the association pay dues of$100 per year, of which $20 covers a one-year subscription to the Teachers 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 Subscriptions Division b. A total of 2.800 one-year subscriptions to Teachers Forum were aliso soid last year to nonmembers and libraries at $36 per subscription. In addition to subscriptions. the journal generated $104,000 in advertising revenues c. The costs to produce the Teachers Forum magazine included $9 per subscription for printing and paper and $4 per subscription for postage and shipping d. A total of 28.300 technical reports and professional texts were sold ov the Books and Recorts Division at an averace selling orice

Answer 1

solution: Income statement sales membership due magazine subscription advertising technical reports and profession al texts Membership Division Magazine Subscriptions Books and Reports DivisionContinuing Education Division Total 1960000 392000 1568000 100800 104000 707500 100800 104000 707500 425000 continuing education courses 425000 707500 3297300 total revenue 1568000 596800 425000 Traceable cost printing and paper postage and shipping salaries personnal cost (25%* salaries) 329000 14200 201600 113200 89600 146200 0 00 56600 159000 180000 300000 75000 68000 850000 211000 39750 15000 45000 52750 212500 30000 158000 45000 o Ccupancy cost 580000 580000 Reimbursement of member costs to local chapters other membership service Instructor fees total traceable cost 550000 550000 76000 76000 345200 1438750 504950 612800 2901700 395600 129250 91850 segment margin 94700 79800 common co st 94000 salaries-corporate staff personnal cost (25% of salaries) 23500 oCcupancy cost postage and shipping General and administrative total common cost 45000 12800 33000 208300 187300 excess of revenue over expense

working sales membership due magazine subscription technical reports and profession al texts continuing education courses Member ship Division Magazine Subscriptions Books and Reports Division Total Continuing Education Division 19600*80 19600*20 2800*36 28300*25 2500* 75+1900*125 Traceable cost printing and paper postage and shipping (19600+2800) 9 28300*4 28300*2 329000-201600-113200 (19600+2800) *4 (203000-53000)*3000/10000 (203000-53000)*1000/10000 53000+(203000-53000)*2000/10000 (203000-53000)*2000/10000 o Ccupancy cost common cost (203000-53000) *3000/10000 159000-146200 oCcupancy cost postage and shipping