A performance report that compares budgeted and actual profit in the sporting goods department of Maxwell€™s Department Store for the month of December follows:

Required
a. Evaluate the department in terms of its increases in sales and expenses. Do you believe it would be useful to investigate either or both of the increases in expenses?
b. Consider storewide electricity cost. Would this cost be a controllable or a noncontrollable cost for the manager of sporting goods? Would it be useful to include a share of storewide electricity cost on the performance report for sportinggoods?

Transcribed Image Text:

Maxwell's Department Store Sporting Goods Performance Report December 2011 Budget Actual Difference $700,000 350,000 $280,000 Sales Less $775,000 $75,000 80,000 ($13,000) Cost of merchandise Salaries of sales staff 430,000 78,000 $267,000 8,000 $28000273000 Controllable profit