The Canadian Association of Nutritionists, a fictional professional association for nutritional counsellors, has 10,000 members. The association operates from a central headquarters but has local chapters throughout Canada. The association€™s monthly journal, Good Nutrition Today , features recent developments in the field. The association also publishes special reports and books, and it sponsors courses that qualify members for the continuing professional education credit required by certification boards. The association€™s statement of revenues and expenses for the current year is presented below:

The board of directors of the association has requested that you construct a segmented income statement that shows the financial contribution of each of the association€™s four major programs€”membership service, journal, books and reports, and continuing education. The following data have been gathered to aid you:
a. Membership dues are $60 per year, of which $15 covers a one-year subscription to the as- sociation€™s journal. The other $45 pays for general membership services.
b. One-year subscriptions to Good Nutrition Today are sold to non-members and libraries at $20 per subscription. A total of 1,000 of these subscriptions were sold last year. In addition to subscriptions, the journal generated $50,000 in advertising revenues. The costs per journal subscription, for members as well as non-members, were $4 for printing and $1 for mailing.
c. A variety of technical reports and professional books were sold for a total of $70,000 during the year. Printing costs for these materials totalled $25,000, and mailing costs totalled $8,000.
d. The association offers a number of continuing education courses. The courses generated revenues of $230,000 last year.
e. Salary costs and the cost of space occupied by each program and the central staff follow:

f. The $120,000 in occupancy costs incurred last year includes $20,000 in rental cost for a portion of the warehouse used by the Membership Services program for storage. The association has a flexible rental agreement that allows it to pay rent only on the warehouse space it uses.
g. Printing costs are for printing the journal, books and reports, and continuing education materials.
h. Distributions to local chapters are for general membership services.
i. Selling and administrative expenses include costs relating to administration of the association as a whole. The association€™s central staff does some mailing of materials for selling and administrative purposes.
j. The expenses that can be traced or assigned to the central staff, as well as any other expenses that are not traceable to the programs, will be treated as common costs. It is not necessary to distinguish between variable and fixed costs.
Required:
1. Prepare a contribution format segmented income statement for the Canadian Association of Nutritionists for last year. This statement should show the segment margin for each program as well as results for the association as a whole.
2. Give arguments for and against allocating all costs of the association to the four programs.

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CANADIAN ASSOCIATION OF NUTRITIONISTS Statement of Revenues and Expenses For the Year Ended December 31 $970,000 Revenues... Expenses: Salaries ... Occupancy costs. Distributions to local chapters Printing .. Mailing.. Continuing education instructors' fees Selling and administrative.. Total expenses... Excess of revenues over expenses 440,000 120,000 210,000 82,000 24,000 60,000 27,000 963,000 $ 7,000