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Buckeye Department Stores, Incorporated, operates a chain of department stores in Ohio. The companys organization chart appears below. Operating data for 20x1 follow. Organization chart
Buckeye Department Stores, Incorporated, operates a chain of department stores in Ohio. The companys organization chart appears below. Operating data for 20x1 follow. Organization chart for Buckeye Department Stores. Buckeye Department Stores has a Columbus and a Cleveland division. The Columbus division has the following stores: olentangy, scioto and downtown. The Cleveland division has individual stores. BUCKEYE DEPARTMENT STORES, INCORPORATED Operating Data for 20x1 (in thousands) Columbus Division Cleveland Division (all stores) Olentangy Store Scioto Store Downtown Store Sales revenue $ 7,000 $ 2,400 $ 13,000 $ 21,000 Variable expenses: Cost of merchandise sold 5,000 2,000 8,000 10,000 Sales personnelsalaries 500 320 740 1,400 Sales commissions 60 40 70 250 Utilities 80 60 180 340 Other 60 45 150 300 Fixed expenses: Depreciationbuildings 150 70 260 500 Depreciationfurnishings 80 60 170 340 Computing and billing 50 30 85 210 Warehouse 70 60 240 480 Insurance 50 35 70 250 Property taxes 45 30 60 220 Supervisory salaries 140 130 430 940 Security 30 30 60 260 The following fixed expenses are controllable at the divisional level: depreciationfurnishings, computing and billing, warehouse, insurance, and security. In addition to these expenses, each division annually incurs $60,000 of computing costs, which are not allocated to individual stores. The following fixed expenses are controllable only at the company level: depreciationbuilding, property taxes, and supervisory salaries. In addition to these expenses, each division incurs costs for supervisory salaries of $140,000, which are not allocated to individual stores. Buckeye Department Stores incurs common fixed expenses of $150,000, which are not allocated to the two divisions. Income-tax expense for 20x1 is $2,300,000. Required: Prepare a segmented income statement for Buckeye Department Stores, Incorporated. How would the segmented income statement help the president of Buckeye Department Stores manage the company
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