Buckeye Department Stores, Inc. operates a chain of department stores in Ohio. The company's organization chart appears below. Operating data for 20x1 follow.

The following fixed expenses are controllable at the divisional level: depreciation-furnishings, computing and billing, warehouse, insurance, and security. In addition to these expenses, each division annually incurs $50,000 of computing costs, which are not allocated to individual stores.
The following fixed expenses are controllable only at the company level: depreciation-building, property taxes, and supervisory salaries. In addition to these expenses, each division incurs costs for supervisory salaries of $100,000, which are not allocated to individual stores.
Buckeye Department Stores incurs common fixed expenses of $120,000, which are not allocated to the two divisions. Income-tax expense for 20x1 is $1,950,000.
Required:
1. Prepare a segmented income statement similar to Exhibit 12-7 for Buckeye Department Stores, Inc. The statement should have the following columns:

Prepare the statement in the contribution format, and indicate the controllability of expenses. Subtract all variable expenses, including cost of merchandise sold, from sales revenue to obtain the contribution margin.
2. How would the segmented income statement help the president of Buckeye Department Stores manage the company?

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Buckeye Department Stores Columbus Division Cleveland Division Olentangy Store Scioto Store Downtown Store Individual Stores BUCKEYE DEPARTMENT STORES, INC. Operating Data for 20x1 in thousands) Columbus Division Olentangy Scloto Downtown Cleveland Division (total for all stores) Store Sales revenue $5,000 $2,400 $11,000 $21,000 Variable expenses: 12,000 1,600 Cost of merchandise sold 2,000 150 120 300 35 Fixed expenses 250 140 75 120 470 50 Computing and billing Warehouse 160 450 70 25 20 100 30 170 Property taxes Supervisory salaries 35 150 30 400 210 Segments of Company Segments of Columbus Division Not Cleveland Columbus Olentangy Scloto Downtown Buckeye Department Stores, Inc. Division Division Store Store Stoe Allocated