Midtown Retail operates a retail store in Kansas City, MO., and St. Louis, MO. The following...
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Midtown Retail operates a retail store in Kansas City, MO., and St. Louis, MO. The following information relates to the Kansas City facility: • The store sold 63,600 units at $24.00 each, after having purchased the units from various suppliers for $17.50. Kansas City salespeople are paid a 1% commission based on gross sales dollars. • Kansas City's sales manager oversees the placement of local advertising contracts, which totaled $61,000 for the year. Local property taxes amounted to $21,500. • The sales manager's $72,000 salary is set by Kansas City's store manager. In contrast, the store manager's $141,000 salary is determined by Midtown's vice president. • Kansas City incurred $10,300 of other noncontrollable costs. • Nontraceable (common) corporate overhead totaled $75,000. Midtown's corporate headquarters is located in St. Louis, and the company uses responsibility accounting to evaluate performance. Required: Prepare a segmented income statement for the Kansas City store, being sure to disclose the segment contribution margin, the segment controllable profit margin, and segment profit margin. Variable costs: Segment contribution margin Traceable, controllable fixed costs: Controllable profit margin Traceable, uncontrollable fixed costs: Segment profit margin Midtown Retail operates a retail store in Kansas City, MO., and St. Louis, MO. The following information relates to the Kansas City facility: • The store sold 63,600 units at $24.00 each, after having purchased the units from various suppliers for $17.50. Kansas City salespeople are paid a 1% commission based on gross sales dollars. • Kansas City's sales manager oversees the placement of local advertising contracts, which totaled $61,000 for the year. Local property taxes amounted to $21,500. • The sales manager's $72,000 salary is set by Kansas City's store manager. In contrast, the store manager's $141,000 salary is determined by Midtown's vice president. • Kansas City incurred $10,300 of other noncontrollable costs. • Nontraceable (common) corporate overhead totaled $75,000. Midtown's corporate headquarters is located in St. Louis, and the company uses responsibility accounting to evaluate performance. Required: Prepare a segmented income statement for the Kansas City store, being sure to disclose the segment contribution margin, the segment controllable profit margin, and segment profit margin. Variable costs: Segment contribution margin Traceable, controllable fixed costs: Controllable profit margin Traceable, uncontrollable fixed costs: Segment profit margin
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Answer rating: 100% (QA)
Sales Revenue 63600 units x 24 1526400 Less Variable costs Cost of Goods sold 63600 units x ... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
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