Prepare performance reports for various organizational levels (Learning Objectives 1, S)

Etown 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 Dallas area (including Store No. 23), and all stores in the state of Texas (including all Dallas stores) are summarized as follows for April:

Budgeted amounts for April were as follows:

Requirements 1. Prepare a report for April that shows the performance of Store No. 23, all of the stores in the Dallas area, and all of the stores in Texas. Follow the format of Exhibit 10-20.
2. As the city manager of Dallas, 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 Etown’s performance report.

Transcribed Image Text:

Store State of No. 23 Dallas Texas 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 37,500 409,700 Depreciation expense..... 3,700 13,100 320,000 Utilities expense. 1,900 . 19,300 245,600 Rent expense. 700 16,600 186,000 Total expenses. 25,300 275,800 2,462,100 Operating income.............. $18,000 $210,200 $ 766,400