Allocation of revenues

Revenues
Membership dues(19700*100) $ 1,970,000
Assigned to magazine subscriptions $ 394,000
19700*20
Assigned to membership division $ 1,576,000

Assigned to non-member magazine $ 80,000

2500*32

Assigned to reports and texts $ 710,000

28400*25

Continuing education courses

One day(75*2600) $ 195,000
Two day(1860*125) $ 232,500
Assigned to continuing education $ 427,500

Salaries Personnel costs

Membership division 229000 57250
Magazine subscription 151000 37750
Books and reports division 338000 84500
Continuing education courses 180000 45000
total assigned to divisions 898000 224500
corporate staff 81000 20250
total 979000 244750

Allocation of costs
Occupany costs
Allocated $ 179,000
Rental costs used by book and reprts div. $ 59,000
$ 238,000

Allocated to
Membership division(179000*0.3) $ 53,700
Magazine division(179000*0.1) $ 17,900
Books and reports division $ 76,900
179000*0.1+59000
Continuing education division $ 35,800
179000*0.2
Corporate staff(179000*0.3) $ 53,700
Total occupancy costs $ 238,000

Printing and paper costs $ 327,000

Assigned to
Magazine and subscrption division $ 177,600
(19700+2500)*8
books and reports division $ 113,600
28400*4
remainder-continuing education division $ 35,800

Postage and shipping costs 213000

Assigned to
Magazine and subscrption division $ 88,800
(19700+2500)*4
books and reports division $ 56,800
28400*2
remainder-common costs $ 67,400
 Associaition Divisions
Magazine Books & Continuing
Total Membership Subs. reports education
Revenues
Membership dues $ 1,970,000 $ 1,576,000 $ 394,000
non-member magazine $ 80,000 $ 80,000
Advertising $ 112,000 $ 112,000
Reports and texts $ 710,000 $ 710,000
continuing education $ 427,500 $ 427,500
total revenuea(a) $ 3,299,500 $ 1,576,000 $ 586,000 $ 710,000 $ 427,500

Expenses traceable to segments

Salaries $ 898,000 $ 229,000 $ 151,000 $ 338,000 $ 180,000
personnel costs $ 224,500 $ 57,250 $ 37,750 $ 84,500 $ 45,000
occupany costs $ 184,300 $ 53,700 $ 17,900 $ 76,900 $ 35,800
reimbursement of
members costs $ 510,000 $ 510,000
other membership $ 560,000 $ 560,000
Printing and paper $ 327,000 $ 177,600 $ 113,600 $ 35,800
postage and shipping $ 145,600 $ 88,800 $ 56,800
Instruction fees $ 78,000 $ 78,000
total traceable expense(b) $ 2,927,400 $ 1,409,950 $ 473,050 $ 669,800 $ 374,600

Division segment margin(a-b) $ 372,100 $ 166,050 $ 112,950 $ 40,200 $ 52,900

Common expenses
salaries $ 81,000
personnel costs $ 20,250
occupany costs $ 53,700
postage and shipping $ 67,400
general admin. $ 31,000
total common expenses $ 253,350
excess of revenues over
expenses $ 118,750
Allocation of revenues

Revenues
Membership dues(20400*100) $ 2,040,000
Assigned to magazine subscriptions $ 408,000
20400*20
Assigned to membership division $ 1,632,000

Assigned to non-member magazine $ 136,800

3600*38

Assigned to reports and texts $ 715,000

28600*25

Continuing education courses

One day(75*2500) $ 187,500
Two day(1800*125) $ 225,000
Assigned to continuing education $ 412,500

Salaries Personnel costs

Membership division 229000 57250
Magazine subscription 153000 38250
Books and reports division 324000 81000
Continuing education courses 195000 48750
total assigned to divisions 901000 225250
corporate staff 86000 21500
total 987000 246750

Allocation of costs
Occupany costs
Allocated $ 151,000
Rental costs used by book and reprts div. $ 55,000
$ 206,000

Allocated to
Membership division(151000*0.3) $ 45,300
Magazine division(151000*0.1) $ 15,100
Books and reports division $ 70,100
151000*0.1+55000
Continuing education division $ 30,200
151000*0.2
Corporate staff(151000*0.3) $ 45,300
Total occupancy costs $ 206,000

Printing and paper costs $ 314,000

Assigned to
Magazine and subscrption division $ 192,000
(20400+3600)*8
books and reports division $ 114,400
28600*4
remainder-continuing education division $ 7,600

Postage and shipping costs 210000

Assigned to
Magazine and subscrption division $ 96,000
(20400+3600)*4
books and reports division $ 57,200
28600*2
remainder-common costs $ 56,800
 Associaition Divisions
Magazine Books & Continuing
Total Membership Subs. reports education
Revenues
Membership dues $ 2,040,000 $ 1,632,000 $ 408,000
non-member magazine $ 136,800 $ 136,800
Advertising $ 113,000 $ 113,000
Reports and texts $ 715,000 $ 715,000
continuing education $ 412,500 $ 412,500
total revenuea(a) $ 3,417,300 $ 1,632,000 $ 657,800 $ 715,000 $ 412,500

Expenses traceable to segments

Salaries $ 901,000 $ 229,000 $ 153,000 $ 324,000 $ 195,000
personnel costs $ 225,250 $ 57,250 $ 38,250 $ 81,000 $ 48,750
occupany costs $ 160,700 $ 45,300 $ 15,100 $ 70,100 $ 30,200
reimbursement of
members costs $ 520,000 $ 520,000
other membership $ 590,000 $ 590,000
Printing and paper $ 314,000 $ 192,000 $ 114,400 $ 7,600
postage and shipping $ 153,200 $ 96,000 $ 57,200
Instruction fees $ 72,000 $ 72,000
total traceable expense(b) $ 2,936,150 $ 1,441,550 $ 494,350 $ 646,700 $ 353,550

Division segment margin(a-b) $ 481,150 $ 190,450 $ 163,450 $ 68,300 $ 58,950

Common expenses
salaries $ 86,000
personnel costs $ 21,500
occupany costs $ 45,300
postage and shipping $ 56,800
general admin. $ 37,000
total common expenses $ 246,600
excess of revenues over
expenses $ 234,550
Allocation of revenues

Revenues
Membership dues(20,000*$100) $ 2,000,000
Assigned to magazine subscriptions $ 400,000
(20000*20)
Assigned to membership division $ 1,600,000

Assigned to non-member magazine $ 75,000

(2500*$30)

Assigned to reports and texts $ 700,000

(28000*$25)

Continuing education courses

One day(2400*$75) $ 180,000
two day(1760*$125) $ 220,000
Assigned to continuing education $ 400,000

Allocation of costs
Occupany costs
Allocated $ 230,000
Rental costs used by book and reprts div. $ 50,000
$ 280,000

Allocated to
Membership division($230000*0.2) $ 46,000
Magazine subscription division(230000*0.2) $ 46,000
Books and reports division $ 119,000
(230000*0.3+50000)
Continuing education division $ 46,000
(230000*0.2)
Corporate staff(230000*0.1) $ 23,000
Total occupancy costs $ 280,000

Printing and paper costs $ 320,000

Assigned to
Magazine and subscrption division $ 157,500
(22,500*$7)
books and reports division $ 112,000
(28,000*$4)
remainder-continuing education division $ 50,500

Postage and shipping costs 176000

Assigned to
Magazine and subscrption division $ 90,000
(22,500*$4)
books and reports division $ 56,000
(28,000*$2)
remainder-common costs $ 30,000
Ques 2:

For:
differentiating costs are essential as separate costs would
enable calculation of contribution margin for each division
also common costs arse due to overall operating actvities
separating them is essential part to derive segment profit

Against
Traceable costs would disappear over time if the segment
itself is disappeared
 Associaition Divisions
Magazine Books & Continuing
Total Membership Subs. reports education
Revenues
Membership dues $ 2,000,000 $ 1,600,000 $ 400,000
non-member magazine $ 75,000 $ 75,000
Advertising $ 100,000 $ 100,000
Reports and texts $ 700,000 $ 700,000
continuing education $ 400,000 $ 400,000
total revenuea(a) $ 3,275,000 $ 1,600,000 $ 575,000 $ 700,000 $ 400,000

Expenses traceable to segments

Salaries $ 840,000 $ 210,000 $ 150,000 $ 300,000 $ 180,000
personnel costs $ 210,000 $ 52,500 $ 37,500 $ 75,000 $ 45,000
occupany costs $ 257,000 $ 46,000 $ 46,000 $ 119,000 $ 46,000
reimbursement of
members costs $ 600,000 $ 600,000
other membership $ 500,000 $ 500,000
Printing and paper $ 320,000 $ 157,500 $ 112,000 $ 50,500
postage and shipping $ 146,000 $ 90,000 $ 56,000
Instruction fees $ 80,000 $ 80,000
total traceable expense(b) $ 2,953,000 $ 1,408,500 $ 481,000 $ 662,000 $ 401,500

Division segment margin(a-b) $ 322,000 $ 191,500 $ 94,000 $ 38,000 $ (1,500)

Common expenses
salaries $ 80,000
personnel costs $ 20,000
occupany costs $ 23,000
postage and shipping $ 30,000
general admin. $ 38,000
total common expenses $ 191,000
excess of revenues over
expenses $ 131,000