B two metropolitans of Australia. The store managers are authorised to make decisions to maintain and improve the operation of their local store. The firm has followed a decentralised structure with two main divisons: Melbourne and Sydney. In addition, Sydney has two sub-divisions: Sydney CBD and Cabramatta. The sales revenue and costs (in $'000s) for the two main divisions for the most recent year are as follows. Sydney Division in $'000s Melbourne division 3456789 10 11 12 in $'000s Sydney CBD Cabramatta All stores 13 Sales revenue 30,420.00 4,968.00 15,210.00 6 14 Variable expenses 15 Cost of merchandise sold 17,940.00 4,176.00 10,170.00 16 Sales personnel wage 2,106.00 648.00 1,053.60 17 Sales commission 327.60 86.40 284.40 18 Utilities 585.60 129.60 292.80 19 Other 367.20 75.60 303.60 20 Fixed expenses 21 Depreciation for buildings 741.60 194.40 370.80 22 Depreciation for fumitures 429.60 108.00 214.80 23 IT services 202.80 64.80 102.00 24 Ware house 632.40 129.60 316.80 25 Store insurance 258.00 54.00 129.60 26 Property taxes 242.40 43.20 122.40 27 Store supervisor wages 1,482.00 216.00 1,104.00 28 29 30 31 32 The following fixed expenses are controllable at the store level: Depreciation for furnitures, IT services, warehouse and insurance. 35 36 37 38 139 40 The following fixed expenses are traceable to divisions or stores, but controllable only at the company level: Depreciation for buildings, property taxes and store supervisor wages. Department Stores MTVII incurs common fixed expenses of $3,100,000 which are not allocated to the two divisions 33 34 22 Depreciation for fumitures 429.60 108.00 214.80 23 IT services 202.80 64.80 102.00 24 Ware house 632.40 129.60 316.80 25 Store insurance 258.00 54.00 129.60 26 Property taxes 242.40 43.20 122.40 27 Store supervisor wages 1,482.00 216.00 1,104.00 28 29 30 31 32 The following fixed expenses are controllable at the store level: Depreciation for furnitures, IT services, warehouse and insurance. 33 34 taxes and store supervisor wages. Department Stores MTVII incurs common fixed expenses of $3,100,000 which are not allocated to the two 35 36 37 The following fixed expenses are traceable to divisions or stores, but controllable only at the company level: Depreciation for buildings, property 38 divisions. 39 40 41 42 Required: 43 44 45 1. Pepare a performance report using the contribution margn format to show the total profitability for the company, the profitability for the two stores that are part of the Sydney division, and the profitability of the Melboume division as a whole. 46 47 48 2. As your role of a management accountant, explain to the managing director on how this report could be used to manage the company 49 50 (Please write your answer to the question (2) here:...) a performance based report on contribution margin format helps oreganistation in 51 following ways: 1) it helps in inderstanding the contribution margin of the segments,2) it helps in understanding the controllable results at 52 each segment level 3) it helps in decision making through understanding performance of eacg segment 4) it helps in taking strategic decisions 53 like continue or discontinue segments based contribution margin and avoidable fixed costs 5) it helps in cost management through control and 54 cost reduction 6) it helps in performance appraisal of employees since they are held accountable and responsible for achieving segment result 55 56 57 58 59 Sheet1