n Show-Off, Inc. sells merchandise through three retail outlets-in Las Vegas, Reno, and Sacramento-and operates a general
Fantastic news! We've Found the answer you've been seeking!
Question:
n
Transcribed Image Text:
Show-Off, Inc. sells merchandise through three retail outlets-in Las Vegas, Reno, and Sacramento-and operates a general corporate headquarters in Reno. A review of the company's income statement indicates a record year in terms of sales and profits. Management, though, desires additional insights about the individual stores and has asked that Judson Wyatt, a newly hired intern, prepare a segmented income statement. The following information has been extracted from Show-Off's accounting records: • The sales volume, sales price, and purchase price data follow: Las Vegas 38,100 units $ 29.00 Reno Sacramento Sales volume 42,100 units $ 27.50 46,440 units $ 25.25 Unit selling price Unit purchase price 13.75 13.75 17.25 • The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries, and other noncontrollable (but traceable) costs: Las Vegas Reno Sacramento Sales commissions Local advertising Local property taxes Sales manager salary Store manager salaries Other noncontrollable costs 7% 78 7% $ 38,500 $ 17,600 7,300 $105,000 12,300 64,500 79,000 37,700 3,550 52,000 9,800 69,500 7,450 Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is determined by the Sacramento store manager: in contrast. store manager salaries are set bv Show-Off's vice president. Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is determined by the Sacramento store manager; in contrast, store manager salaries are set by Show-Off's vice president. Nontraceable fixed corporate expenses total $343,450. The company uses a responsibility accounting system. Required: I. Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off. 2. Identify the probable causes for the poor performance of the weakest store. 3. Which of the following should be reviewed in evaluating the performance of the store manager? Required 1 Required 2 Required 3 Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off. (Round your answers to the nearest whole dollar.) Show-Off, Inc. Las Vegas Reno Sacramento Sales revenue Variable operating expenses: Sales commissions Total $ O $ $ Segment contribution margin $ O $ $ O $ Fixed expenses controllable by segment manager: Local advertising Sales manager salary Total $ 0 $ $ 0 $ Profit margin controllable by segment manager $ $ $ 0 $ Fixed expenses traceable to segment, but controllable by others: Store manager salaries Sales manager salary Total O $ 0 $ O $ Profit margin controllable by segment manager Fixed expenses traceable to segment, but controllable by others: $ Store manager salaries Total $ 0 $ $ $ Segment profit margin $ $ $ Operating income Requirad 1 Required 2 > %24 %24 %24 Show-Off, Inc. sells merchandise through three retail outlets-in Las Vegas, Reno, and Sacramento-and operates a general corporate headquarters in Reno. A review of the company's income statement indicates a record year in terms of sales and profits. Management, though, desires additional insights about the individual stores and has asked that Judson Wyatt, a newly hired intern, prepare a segmented income statement. The following information has been extracted from Show-Off's accounting records: • The sales volume, sales price, and purchase price data follow: Las Vegas 38,100 units $ 29.00 Reno Sacramento Sales volume 42,100 units $ 27.50 46,440 units $ 25.25 Unit selling price Unit purchase price 13.75 13.75 17.25 • The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries, and other noncontrollable (but traceable) costs: Las Vegas Reno Sacramento Sales commissions Local advertising Local property taxes Sales manager salary Store manager salaries Other noncontrollable costs 7% 78 7% $ 38,500 $ 17,600 7,300 $105,000 12,300 64,500 79,000 37,700 3,550 52,000 9,800 69,500 7,450 Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is determined by the Sacramento store manager: in contrast. store manager salaries are set bv Show-Off's vice president. Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is determined by the Sacramento store manager; in contrast, store manager salaries are set by Show-Off's vice president. Nontraceable fixed corporate expenses total $343,450. The company uses a responsibility accounting system. Required: I. Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off. 2. Identify the probable causes for the poor performance of the weakest store. 3. Which of the following should be reviewed in evaluating the performance of the store manager? Required 1 Required 2 Required 3 Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off. (Round your answers to the nearest whole dollar.) Show-Off, Inc. Las Vegas Reno Sacramento Sales revenue Variable operating expenses: Sales commissions Total $ O $ $ Segment contribution margin $ O $ $ O $ Fixed expenses controllable by segment manager: Local advertising Sales manager salary Total $ 0 $ $ 0 $ Profit margin controllable by segment manager $ $ $ 0 $ Fixed expenses traceable to segment, but controllable by others: Store manager salaries Sales manager salary Total O $ 0 $ O $ Profit margin controllable by segment manager Fixed expenses traceable to segment, but controllable by others: $ Store manager salaries Total $ 0 $ $ $ Segment profit margin $ $ $ Operating income Requirad 1 Required 2 > %24 %24 %24
Expert Answer:
Answer rating: 100% (QA)
1 Showoff Inc Las Vegas Reno Sacremento Sales 2774760 902400 936000 936360 Variable operating Expens... View the full answer
Related Book For
Supply Chain Focused Manufacturing Planning and Control
ISBN: 978-1133586715
1st edition
Authors: W. C. Benton
Posted Date:
Students also viewed these accounting questions
-
N balls labeled 1 through N are placed in Box 1 while a Box 2 is initially empty. At each time instant, one of the N balls is chosen (with equally probability) and moved to the other box. Let X [k]...
-
Use Algorithm 4.5 with (i) n = m = 3, (ii) n = 3, m = 4, (iii) n = 4, m = 3, and (iv) n = m = 4 to approximate the integrals in Exercise 3. In Exercise 3 T/4 (2y sin cos2 x) dy dx In xy dy dx (x2 +...
-
N sources of current with different emf's are connected as shown in Fig. 3.40. The emf's of the sources are proportional to their internal resistances, i.e. ε = aR, where a is an assigned...
-
One end of a light, elastic string, of natural length 1.2m and modulus of elasticity 32N, is attached to a fixed point, B. A particle, P, of mass 1.5 kg, is then attached to the other end of the...
-
Using the zero-coupon bond yields in Table 8.9, what is the fixed rate in a 4-quarter interest rate swap? What is the fixed rate in an 8-quarter interest rate swap? Discuss.
-
Wesley Company will issue a zero-coupon bond this coming month. The projected yield for the bond is 5%. If the par value of the bond is $1,000, what is the price of the bond using a semiannual...
-
Maribel Baltazar was hired by clothing retail merchandiser Forever 21 in 2007. During the hiring process, Baltazar was given an 11-page document to sign, two pages of which contained an arbitration...
-
Andrew Cha, the founder of Colorscope, Inc., a small, vibrant firm in the graphic arts industry, had seen his business change dramatically over the years. The rapid development of such technologies...
-
Construct and group the following data into classes. Calculate the frequency by classes, relative frequencies and cumulative frequencies. A. Calculate the size of each class (use 6 classes) a....
-
Asbat Pharmaceuticals (Asbat) is a leading pharmaceutical company that has been in existence for 22 years. Asbat has a calendar year-end and is audited annually. Asbat only operates in the United...
-
Required information [The following information applies to the questions displayed below.] Jeremy earned $101,100 in salary and $7,100 in interest income during the year. Jeremy's employer withheld...
-
The Social Security system levies a tax on workers and pays benefits to the elderly. Suppose that Congress increases both the tax and the benefits. For simplicity, assume that Congress announces that...
-
If the tax law granted firms a tax rebate when they lost money, even when they had not previously earned a profit, then would the marginal benefit curve for debt still decline as debt increased?
-
Why is debt usually the cheapest finance source?
-
Suppose an all-equity firm is sufficiently profitable that the likelihood of it experiencing a loss in the near future is close to zero. For this firm, what does the marginal benefit curve of debt...
-
Managers are sometimes accused of being too conservative. If a firm does not borrow as much as it should to reach its optimal capital structure, what market forces might pressure management to use...
-
Find the speed ( ( in units of meters / / sec ) ) of a 2 5 0 0 2 5 0 0 kg SUV having a kinetic energy of 1,000,000 Joules.
-
Give the structural formulas of the alkenes that, on ozonolysis, give: a. (CH3)2C=O and CH2=O b. Only (CH3CH2)2C=O c. CH3CH=O and CH3CH2CH=O d. O=CHCH2CH2CH2CH=O
-
Sandy's Cabinet Company uses MRP to schedule its production. Due to the current recession and the need to cut costs, Sandy has targeted the inventory investment area for cost reduction. However, the...
-
Consider the following (partial) time-phased MPS record: a. Complete the record b. Are there any problems? c. What's the earliest an order for 44 units can be promised? d. Assume that an order for 12...
-
Differentiate between a push and pull production system.
-
Data from the last nine decades for the broad U.S. equity market yield the following statistics: average excess return, 8.3%; standard deviation, 20.1%. a. To the extent that these averages...
-
Suppose that the risk premium on the market portfolio is estimated at 8% with a standard deviation of 22%. What is the risk premium on a portfolio invested 25% in Toyota and 75% in Ford if they have...
-
Stock XYZ has an expected return of 12% and risk of = 1. Stock ABC has expected return of 13% and = 1.5. The markets expected return is 11%, and rf = 5%. a. According to the CAPM, which stock is a...
Study smarter with the SolutionInn App