Actual income statements Winnipeg Manitoba Companywide $ 148,900 $ 1,640,000 $ 4,700,000 Revenue Expenses: Region manager/headquarters office $ - $ 58,000 $ 115,000 Cost of materials 81,400 871,700 1,803,000 1,123,000 38,000 415,900 Salary expense Depreciation expense 7,300 434,000 Utilities expense 4,400 2,700 91,000 46,200 34,600 264,000 175,000 Rent expense 133 800|| 1517 4001 3914 000 Rent expense 2,700 34,600 175,000 Total expenses 133,800 1,517,400 3,914,000 $ 15,100||$ 122,600 $ 786,000 Operating income More info . Budgeted amounts for July were as follows: Winnipeg Manitoba Companywide $ 163,900 $ 1,768,000 $ 4,950,000 Revenue Expenses: Region manager/headquarters office $- $ 63,600 $ 117,000 1,978,000 Cost of materials 86,100 963,400 441,000 38,400 1,099,000 Salary expense Depreciation expense Utilities expense 7,300 87,700 448,000 4,900 3,500 54,700 32,600 274,000 172,000 Rent expense Utilities expense 4,900 3,500 54,700 32,600 274,000 172,000 Rent expense Total expenses 140,200 1,643,000 4,088,000 $ 23,700||$ 125,000 $ 862,000 Operating income Pet World operates a chain of pet stores in the Prairies. The manager of each store reports to the regional manager, who, in turn, reports to headquarters in Regina. The actual income statements for the Winnipeg store, the Manitoba region (including the Winnipeg store), and the company as a whole (including the Manitoba region) for July are as follows: (Click the icon to view the actual income statements.) (Click the icon to view the budgeted income statements.) Requirements 1. Prepare a report for July that shows the performance of the Winnipeg store, the Manitoba region, and the company as a whole. 2. As the Manitoba region manager, would you investigate the Winnipeg store on the basis of this report? Why or why not? 3. Briefly discuss the benefits of budgeting. Base your discussion on Pet World's performance report. Requirement 1. Prepare a report that shows the performance of the Winnipeg store, the Manitoba region and the company as a whole. We will begin with the company as a whole. (Use parentheses or a minus sign when entering the headquarters' expense and any unfavourable variances.) We will begin with the company as a whole. (Use parentheses or a minus sign when entering the headquarters' expense and any unfavourable variances.) Pet World Responsibility Accounting Performance Report July Companywide Variance Favourable (Unfavourable) Actual Budget Operating Income of Regions and Headquarters' Office Expense Headquarters' office expense Manitoba Stores in other regions Operating income Now prepare the report that shows the performance of the Manitoba region. (Use parentheses or a minus sign when entering the region manager's expense and any unfavourable variances.) Manitoba Operating Income of Stores and Region Manager's Office Expense Variance Favourable (Unfavourable) Actual Budget Region manager's office expense Winnipeg Other Manitoba stores Operating income Finally, show the performance of the Winnipeg store. (For variances with a zero balance, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign when entering any unfavourable variances.) Winnipeg Variance Favourable (Unfavourable) Revenues and Expenses: Actual Budget Revenue Expenses: Cost of materials Salary expense Depreciation expense Utilities expense Rent expense Total expenses Operating income Requirement 2. As the Manitoba region manager, would you investigate the Winnipeg store on the basis of this report? Why or why not? (Enter all amounts as positive. Round percentages to two decimal places, X.XX%.) As region manager of the Manitoba region, you which is is % of its budgeted investigate the Winnipeg office on the basis of this report. Its operating income variance of $ investigating. The company afford to keep operating marginally profitable stores. income. This difference is Requirement 3. Briefly discuss the benefits of budgeting. Base your discussion on Pet World's performance report. Budgeting plan. The various levels of Pet World's management their operations to develop the detailed budgets in the performance report. from the company headquarters to region managers, and from region managers to Budgeting V coordination and communication. The budgets of the performance report communicate store managers and their staff. Budgets also help managers activities across the company's operations. The budget versus actual comparisons in the report are better indicators of than current period actual amounts versus past period actual Budgeting helps managers evaluate amounts. Budgeting also for measuring performance, and if The Winnipeg store, other Manitoba stores, stores in other regions, and the headquarters will be V to meet their budgets if budgets are the benchmark accept the budgets as fair. participation in the budgeting process helps ensure acceptance. Actual income statements Winnipeg Manitoba Companywide $ 148,900 $ 1,640,000 $ 4,700,000 Revenue Expenses: Region manager/headquarters office $ - $ 58,000 $ 115,000 Cost of materials 81,400 871,700 1,803,000 1,123,000 38,000 415,900 Salary expense Depreciation expense 7,300 434,000 Utilities expense 4,400 2,700 91,000 46,200 34,600 264,000 175,000 Rent expense 133 800|| 1517 4001 3914 000 Rent expense 2,700 34,600 175,000 Total expenses 133,800 1,517,400 3,914,000 $ 15,100||$ 122,600 $ 786,000 Operating income More info . Budgeted amounts for July were as follows: Winnipeg Manitoba Companywide $ 163,900 $ 1,768,000 $ 4,950,000 Revenue Expenses: Region manager/headquarters office $- $ 63,600 $ 117,000 1,978,000 Cost of materials 86,100 963,400 441,000 38,400 1,099,000 Salary expense Depreciation expense Utilities expense 7,300 87,700 448,000 4,900 3,500 54,700 32,600 274,000 172,000 Rent expense Utilities expense 4,900 3,500 54,700 32,600 274,000 172,000 Rent expense Total expenses 140,200 1,643,000 4,088,000 $ 23,700||$ 125,000 $ 862,000 Operating income Pet World operates a chain of pet stores in the Prairies. The manager of each store reports to the regional manager, who, in turn, reports to headquarters in Regina. The actual income statements for the Winnipeg store, the Manitoba region (including the Winnipeg store), and the company as a whole (including the Manitoba region) for July are as follows: (Click the icon to view the actual income statements.) (Click the icon to view the budgeted income statements.) Requirements 1. Prepare a report for July that shows the performance of the Winnipeg store, the Manitoba region, and the company as a whole. 2. As the Manitoba region manager, would you investigate the Winnipeg store on the basis of this report? Why or why not? 3. Briefly discuss the benefits of budgeting. Base your discussion on Pet World's performance report. Requirement 1. Prepare a report that shows the performance of the Winnipeg store, the Manitoba region and the company as a whole. We will begin with the company as a whole. (Use parentheses or a minus sign when entering the headquarters' expense and any unfavourable variances.) We will begin with the company as a whole. (Use parentheses or a minus sign when entering the headquarters' expense and any unfavourable variances.) Pet World Responsibility Accounting Performance Report July Companywide Variance Favourable (Unfavourable) Actual Budget Operating Income of Regions and Headquarters' Office Expense Headquarters' office expense Manitoba Stores in other regions Operating income Now prepare the report that shows the performance of the Manitoba region. (Use parentheses or a minus sign when entering the region manager's expense and any unfavourable variances.) Manitoba Operating Income of Stores and Region Manager's Office Expense Variance Favourable (Unfavourable) Actual Budget Region manager's office expense Winnipeg Other Manitoba stores Operating income Finally, show the performance of the Winnipeg store. (For variances with a zero balance, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign when entering any unfavourable variances.) Winnipeg Variance Favourable (Unfavourable) Revenues and Expenses: Actual Budget Revenue Expenses: Cost of materials Salary expense Depreciation expense Utilities expense Rent expense Total expenses Operating income Requirement 2. As the Manitoba region manager, would you investigate the Winnipeg store on the basis of this report? Why or why not? (Enter all amounts as positive. Round percentages to two decimal places, X.XX%.) As region manager of the Manitoba region, you which is is % of its budgeted investigate the Winnipeg office on the basis of this report. Its operating income variance of $ investigating. The company afford to keep operating marginally profitable stores. income. This difference is Requirement 3. Briefly discuss the benefits of budgeting. Base your discussion on Pet World's performance report. Budgeting plan. The various levels of Pet World's management their operations to develop the detailed budgets in the performance report. from the company headquarters to region managers, and from region managers to Budgeting V coordination and communication. The budgets of the performance report communicate store managers and their staff. Budgets also help managers activities across the company's operations. The budget versus actual comparisons in the report are better indicators of than current period actual amounts versus past period actual Budgeting helps managers evaluate amounts. Budgeting also for measuring performance, and if The Winnipeg store, other Manitoba stores, stores in other regions, and the headquarters will be V to meet their budgets if budgets are the benchmark accept the budgets as fair. participation in the budgeting process helps ensure acceptance