League Apparel Ltd is a large garment manufacturer that operates through two manufacturing stores in Australia (Queensland and New South Wales (NSW)).

The following data relates to the Queensland’s store.

Sales Revenue	$2 850 000
Variable Manufacturing costs	1 010 000
Variable selling & admin costs	320 000
Assistant store manager’s salary	56 000
Store manager’s salary	86 000
Local property taxes	5000

The Assistant store manager’s salary is set by the store manager and the store manager’s salary is set by top management. Other controllable fixed costs amount to $80 000. League Apparel Ltd uses a responsibility accounting system.

REQUIRED:

1. Calculate the following in relation to the Queensland’s store.
   a. Store contribution margin.
   b. Total controllable fixed expenses. 
2. c. Profit margin controllable by store manager.
3. d. Total fixed expenses attributable to Queensland’s store, but controllable by others 
4. e. Profit margin attributable to Queensland’s store.

2. Which of the profit figures calculated above should be used to evaluate the performance of Queensland store manager? Explain your answer. 
3. Briefly outline and discuss two main purposes of performance measurement systems.

Answer rating: 100% (QA)

a Store contribution margin Sales less variable cost sales100 2850000 1010000 320000 2850000 100 533... View the full answer