Buckeye Department Stores, Inc. operates a chain of department stores in Ohio. The company?s organization chart appears below. Operating data for 20x1 follow.

BUCKEYE DEPARTMENT STORES, INC.
Operating Data for 20x1
(in thousands)

	Olentangy Store (Columbus Division)	Scioto Store (Columbus Division)	Downtown Store (Columbus Division)	Cleveland Division (total for all stores) (Columbus Division)
Sales revenue	$6,000	$2,500	$15,000	$23,000
Variable expenses:
Cost of merchandise sold	4,000	2,100	6,000	15,000
Sales personnel-salaries	400	320	750	1,800
Sales commissions	80	60	100	230
Utilities	90	80	150	320
Other	70	35	120	280
Fixed expenses:
Depreciation-buildings	140	100	280	520
Depreciation-furnishings	70	50	140	320
Computing and billing	40	20	75	190
Warehouse	60	80	250	500
Insurance	40	25	100	230
Property taxes	35	20	90	200
Supervisory salaries	150	120	450	920
Security	20	20	90	240

The following fixed expenses are controllable at the divisional level: depreciation-furnishings, computing and billing, warehouse, insurance, and security. In addition to these expenses, each division annually incurs $70,000 of computing costs, which are not allocated to individual stores.

The following fixed expenses are controllable only at the company level: depreciation-building, property taxes, and supervisory salaries. In addition to these expenses, each division incurs costs for supervisory salaries of $100,000, which are not allocated to individual stores.

Buckeye Department Stores incurs common fixed expenses of $120,000, which are not allocated to the two divisions. Income-tax expense for 20x1 is $2,550,000.

Required:

a. Prepare a segmented income statement for Buckeye Department Stores, Inc.

b. How would the segmented income statement help the president of Buckeye Department Stores manage the company?

Answer rating: 100% (QA)

Answer Segments of Company Segments of Columbus Division Buckeye Department Stores Inc Cleveland Div... View the full answer