EStore is a chain of home electronics stores. Each store has a manager who answers to a city manager, who in turn reports to a statewide manager. The actual income statements of Store No. 23, all stores in the Phoenix area (including Store No. 23), and all stores in the state of Arizona (including all Phoenix stores) are summarized as follows for October:

Budgeted amounts for October were as follows:

Requirements 

1. Prepare a report for October that shows the performance of Store No. 23, all the stores in the Phocnix area, and all the stores in Arizona. Follow the format of Exhibit 22-19.

2. As the city manager of the Phoenix area stores, would you investigate Store No. 23 on the basis of this report? Why or why not?

3. Briefly discuss the benefits of budgeting. Base your discussion on Estore's performance report.

Transcribed Image Text:

Store No. 23 Phoenix State of Arizona Sales revenue $43,300 $486,000 $3,228,500 Expenses: City/state manager's office expenses $ $ 18.000 $ 44,000 Cost of goods sold 15,000 171,300 1,256,800 Salary expense 4,000 37,500 Other operating expenses 6,300 49,000 Total expenses 25.300 275,800 409,700 751,600 2,462,100 Operating income $18,000 $210,200 $ 766,400