Animal World operates a chain of pet stores in the Prairies. The manager of each store reports to the regional manager, who, in turn, reports to headquarters in Red Deer, Alberta.
The actual and budgeted income statements for the Saskatoon store, the Saskatchewan region (including the Saskatoon store), and the company as a whole (including the Saskatchewan region) for July are as follows:

Budgeted amounts for July were as follows:

Requirements
1. Prepare a report for July that shows the performance of the Saskatoon store, the Saskatchewan region, and the company as a whole.
2. As the Saskatchewan regional manager, would you investigate the Saskatoon store on the basis of this report? Why or why not?
3. Briefly discuss the benefits of budgeting. Base your discussion on Animal World€™s performance report.

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Saskatoon Saskatchewan Companywide $148,400 $1,645,000 Revenue $4,300,000 Expenses Regional manager/ headquarters offce Cost of materials Salary expense 871,800 415,700 93,000 46,500 34,400 135,400 1,516,400 S 13,000 128,600 81,800 38,800 7,700 4,600 2,500 55,000 118,000 1,808,000 1,121,000 439,000 265,000 178,000 3,929,000 371,000 Rent expense Total expenses Operating inco Saskatoon Saskatchewan Companywide S162,400 1,768,000 54,550,000 Revenue Expenses Regional manager/ headquarters office 6 86,700 38,900 7,700 4,700 4,000 142,000 0,600 963,600 440,000 87,400 54,400 32,700 1638,700 20,400 129,300 $ 120,000 1,974,000 1,092,000 447,000 274,000 172,000 4,079,000 $ 471,000 Salary expense Depreciation expense.. Utilities exe Rent expense Total expenses Operating income