Assume Annie's Homemade divides its total mobile sales into three segments. The Corporate Subscriptions segment, which...
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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. Requirements 1 to 3 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? 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 Segment margin Common fixed expenses Net operating income SA Mobile 0 0 0 Corporate Subscriptions 0 Food Truck 0 $ 0 0 Catered Events 0 0 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. Requirements 1 to 3 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? 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 Segment margin Common fixed expenses Net operating income SA Mobile 0 0 0 Corporate Subscriptions 0 Food Truck 0 $ 0 0 Catered Events 0 0
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