G Company has three stores known as Big, Medium, and Small respectively. Total Sales from the three
Question:
G Company has three stores known as Big, Medium, and Small respectively. Total Sales from the three stores were $1,500,000 this last year. Information from the accounting information system on recent performance is as follows: Big Medium Small Sales 25,000 units @ $30 = $750,000
(this is 50% of company sales) 18,750 units @ $32 = $600,000 (this is 40% of company sales) 3,750 units @ $40 = $150,000 (this is 10% of company sales)
Variable Cost Per Unit $24 $24 $36 Traceable Fixed Costs (Advertising) $20,000 $10,000 $5,000 Allocated Companywide Fixed Costs $69,000 $55,200 $13,800 ($138,000 total allocated By sales 50%, 40%, 10%)
Prepare G Company's Segment Margin Income Statement with a column for each subunit, and a fourth column to "Total" for the entire company. (b) Then explain whether "Small" store should be closed or not. ( c) Then explain why or why not it should be closed AND what the relevant dollar amount change in total company income would be if it was closed.
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr