Final exercise of the week - Biden Department Store has four departments: men's, women's, children's, and...

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Final exercise of the week - Biden Department Store has four departments: men's, women's, children's, and electronics. The following information is provided: Men's Women's Children's Electronics Floor space 10,000 sq. ft. 20,000 sq. ft. 8,000 sq. ft. 12,000 sq. ft. Sales $45,000 $75,000 $30,000 $20,000 The company's accountant needs to allocate the store's annual rent of $180,000. 1. The store sales manager insists that the store rent should be divided among the four departments based on sales generated in each department. The store operations manager insists that the store rent should be allocated to the four departments based on the area occupied. The general manager insists that the rent should be divided equally among the four departments. Who is right? 2. If the departmental supervisors are paid a bonus based on the final profit generated in their department after allocating the store rent, which supervisor will be most happy based on your conclusion to question 1 above? And which supervisor will be least happy? (Assume that the departmental margins before allocating the store rent are in proportion to the departmental sales amounts] Final exercise of the week - Biden Department Store has four departments: men's, women's, children's, and electronics. The following information is provided: Men's Women's Children's Electronics Floor space 10,000 sq. ft. 20,000 sq. ft. 8,000 sq. ft. 12,000 sq. ft. Sales $45,000 $75,000 $30,000 $20,000 The company's accountant needs to allocate the store's annual rent of $180,000. 1. The store sales manager insists that the store rent should be divided among the four departments based on sales generated in each department. The store operations manager insists that the store rent should be allocated to the four departments based on the area occupied. The general manager insists that the rent should be divided equally among the four departments. Who is right? 2. If the departmental supervisors are paid a bonus based on the final profit generated in their department after allocating the store rent, which supervisor will be most happy based on your conclusion to question 1 above? And which supervisor will be least happy? (Assume that the departmental margins before allocating the store rent are in proportion to the departmental sales amounts]

Answer rating: 100% (QA)

1 The store operation manager suggestion is correctRent expense should be allo... View the full answer