MANAGERIAL ANALYSIS Lanier Company manufactures expensive watch cases sold as souvenirs. Three of A s sales departments are Retail Sales, Wholesale Sales, and Outlet Sales. The Retail Sales Department is a profit center The Wholesale Sales Department is a cost center. Its manag ers merely take orders from customers who purchase through the company's wholesale it catalog. The Outlet Sales Department is an investment center because each manager is given full responsibility for an outlet store location. The manager general is fairly independent in of company control. Mary Gammel is a manager in the Retail Sales Department. Stephen Flott the Wholesale Sales Depart in San Francisco. The f departments. manages ment. Jose Gomez manages the Golden Gate Club outlet store ollowing are the budget responsibility reports for each of the three Bud Outlet Retail Sales Sales Sales $200,000 400,000 750,000 Variable costs 25,000 5,000 3,000 5,000 2,000 Cost of goods sold Advertising Sales salaries Printing 100,000 30,000 15.000 20,000 30,000 150,000 100,000 75,000 10,000 20,000 Fixed costs 10,000 1,000 40,000 800,000 Rent 30,000 2,000 100,000 1,200,000 50,000 5,000 75,000 1,000,000 Insurance Depreciation Investment in assets Actual Results Retail Wholesale Sales Outlet Sales 750,000 S 400,000 $200,000 Sales Variable costs Cost of goods sold Advertising Sales salaries Printing 192.000 100,000 75,000 122,000 30,000 26,500 5,000 3,000 5,000 1,500 15,000 20,000 21,000 10,000 14,000 Fixed costs 40,000 5,000 80,000 50,000 12,300 2,000 90,000 1,000 56,000 Insurance Depreciation Investment in asset:s 1,200,000 1,000,000 800,000 Instructions Determine which of the items should be included in the responsibility report for each (a) of the three managers. (b) Compare the budgeted measures be called to the attention of each manager with the actual results. Decide which results should