Managerial Accounting

(4 marks) QUESTION 2: MANAGING AND REPORTING PERFORMANCE (20 marks) [Suggested time: 25 minutes] League Apparel Lid 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 Lid uses a responsibility accounting system. REQUIRED: 1) Calculate the following in relation to the Queensland's store. (a) Store contribution margin. (3 marks) (b) Total controllable fixed expenses. (2 marks) (c) Profit margin controllable by store manager. (2 marks) (d) Total fixed expenses attributable to Queensland's store, but controllable by others. (2 marks) (e) Profit margin attributable to Queensland's store. 2 marks) 2) Which of the profit figures calculated above should be used to evaluate the performance of Queensland store manager? Explain your answer. (4 marks) 3) Briefly outline and discuss two main purposes of performance measurement systems. (5 marks) Page 4 of 7