.

Cathy's Classic Ciothes (CCC) is a speciality workwear apparel store that targets primanly professional wormen CCC leases space for storefronts in popular malls and shopping centers, and the organizational structure consists of regions, districts and stres Each region consists of two or more districts each district consists of three or more stores Each store, distrikt, and region has been established as a profit center At alf hevels, the company uses a management by objective (MBO) system and a respansibility accounting system that focuses on information and knowledge rather than blame and control Each year, managers, n consutation with their supervisors, establish goals which are not solely financial, and these goals are integrated into the budget Actual perfotmance is measured each month 12 The Northeast Region consists of Districts A and B District A consists of three stores, 1, 2 and 3 with District B consisting of three stores, 4,5, and 6. District As performance has not been up to expectations in the past For the month of May the district manager has set performance gols with the managers of Stores 1 and 2 who will receve bonuses if certain perlormance measures afe exceeded The manager of Store 3 decided not to'participate in the bonusscheme Since the district manager is unsure what type of bonus will encourage better performance the manager of StoreI will receive a bonus based on sales in excess of budgcted sales of 570,000 while the manager of Store 2 will receive a bonus based 17 on net income in excess of budgeted net income The companys net income goal for each store is 12 percent of sales The budoeled sales tor Store 2 are 5530.000 to 20 Other pertinent data for the month of May 2013 are given below