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CASE 6–28 Service Organization; Segment Reporting [LO4] The American Association of

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CASE 6–28 Service Organization; Segment Reporting [LO4] The American Association of… 1 answer below » CASE 6–28 Service Organization; Segment Reporting [LO4] The American Association of Acupuncturists is a professional association for acupuncturists that has 10,000 members. The association operates from a central headquarters but has local chapters throughout North America. The association’s monthly journal, American Acupuncture, 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 state certification boards. The association’s statement View complete question » CASE 6–28 Service Organization; Segment Reporting [LO4] The American Association of Acupuncturists is a professional association for acupuncturists that has 10,000 members. The association operates from a central headquarters but has local chapters throughout North America. The association’s monthly journal, American Acupuncture, 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 state 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 asso- ciation’s journal. The other $45 pays for general membership services. b.       One-year subscriptions to American Acupuncture are sold to nonmembers 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 nonmembers, 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 totaled $25,000, and mailing costs totaled $8,000. d.       The association offers a number of continuing education courses. The courses generated rev- enues of $230,000 last year. e.       Salary costs and space occupied by each program and the central staff are as follows: Salaries Space Occupied (square feet) Membership services . . . . . . . . . . . . $170,000 3,000 Journal . . . . . . . . . . . . . . . . . . . . . . . 60,000 1,000 Books and reports . . . . . . . . . . . . . . 40,000 1,000 Continuing education . . . . . . . . . . . . 50,000 2,000 Central staff . . . . . . . . . . . . . . . . . . . 120,000 3,000 Total  . . . . . . . . . . . . . . . . . . . . . . . . . $440,000 10,000 f. The $120,000 in occupancy costs incurred last year includes $20,000 in rental cost for a por- tion of the warehouse used by the Membership Services program for storage purposes. The association has a flexible rental agreement that allows it to pay rent only on the warehouse space it uses. g.        Printing costs other than for journal subscriptions and for books and reports related to Con- tinuing Education. h.       Distributions to local chapters are for general membership services. i.        General and administrative expenses include costs relating to overall administration of the association as a whole. The association’s central staff does some mailing of materials for gen- eral 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 treate…


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