Show-Off, Inc. sells merchandise through three retail outlets-in Las Vegas, Reno, and Sacramento- and operates a general corporate headquarters in Reno. A review of the company's income statement indicates a record year in terms of sales and profits. Management, though, desires additional insights about the individual stores and has asked that Judson Wyatt, a newly hired intern, prepare a segmented income statement. The following information has been extracted from Show-Off's accounting records:
€¢ The sales volume, sales price, and purchase price data follow:

€¢ The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries, and other non-controllable (but traceable) costs:

Local advertising decisions are made at the store manager level. The sales manager's salary in
Sacramento is determined by the Sacramento store manager; in contrast, store manager salaries are set by Show-Off's vice president.
€¢ Non-traceable fixed corporate expenses total $192,300.
€¢ The company uses a responsibility accounting system.
Required:
1. Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off?
2. Determine the weakest-performing store and present an analysis of the probable causes of poor performance?
3. Assume that an opening has arisen at the Reno corporate headquarters and the company's chief executive officer (CEO) desires to promote one of the three existing store managers. In evaluating the store managers' performance, should the CEO use a store's segment contribution margin, the profit margin controllable by the store manager, or a store's segment profit margin? Justify your answer.

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Sales volume Unit selling price . Unit purchase price. Las Vegas 37,000 units $12.00 Reno 41,000 units $11.00 5.50 Sacramento 46,000 units $9.50 6.00 5.50 Las Vegas Reno Sacramento Sales commissions Local advertising Local property taxes Sales manager salary Store manager salaries Other noncontrollable costs 6% 6% 6% $11,000 4,500 $48,000 6,000 32,000 38,000 17,800 $22,000 2,000 31,000 5,800 39,000 4,600