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Question 5.5: Segment Analysis Morse Company does business in two regional......

Segment Analysis

Morse Company does business in two regional segments: East and West. The following annual revenue information was determined from the accounting system’s invoice information:

Prepare horizontal and vertical analyses of the segments.

Segment 2012 2011
East $25,000 $20,000
West \underline{50,000}  \underline{60,000}
Total revenues \underline{\$ 75,000} \underline{\$ 80,000}
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Horizontal analysis:

Segment 2012 2011 Increase (Decrease)
Amount Percent
East $25,000 $20,000 $ 5,000 25.0%
West \underline{50,000} \underline{60,000} \underline{(10,000)} (16.7)
Total revenues \underline{\$ 75,000} \underline{\$ 80,000} \underline{\$ (5,000)} (6.3)

Vertical analysis:

Segment 2012 2011
Amount Percent Amount Percent
East $25,000 33.3% $20,000 25.0%
West \underline{50,000} \underline{66.7} \underline{60,000} \underline{75.0}
Total revenues \underline{\$ 75,000} \underline{100.0 \%} \underline{\$ 80,000} \underline{100.0 \%}

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