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a) The following information is from Musical Inc. Ltd. It sells musical instruments with three stores in three different states across Australia. The July income
a) The following information is from Musical Inc. Ltd. It sells musical instruments with three stores in three different states across Australia. The July income statement for all stores is shown below:
Musical Inc. Ltd. Income Statement Month Ending July 31, 2023 __________________________________________________________________________ VICTORIA Store NSW Store QUEENSLAND Store Sales $52 920 $32 340 $74 970 Cost of goods sold 27 930 14 700 36 750 Gross profit $24 990 $17 640 $38 220 Expenses Selling expenses 3 087 1 470 4 704 Wages expense 11 760 8 820 13 230 Costs allocated from head office 8 085 4 410 22 050 Total expenses $22 932 $14 700 $39 984 Operating income (loss) $ 2 058 $ 2 940 ($1 764) Required: i. Comment on the operating income results for each store. (1.5 marks) ANSWER a (i): ii. Now assume the costs allocated from corporate is an uncontrollable cost for each store. How does this change your assessment of each store? Explain. (1.5 marks) ANSWER a (ii): b) The owner of Advertising Pro wants to adopt the Balanced Scorecard in the company. There are two divisions: Video production and Radio. He has asked you to explain how BSC can improve his company's performance. Write a short report to convince him to implement BSC, and justify your reasons. (4 marks) ANSWER b:
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