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Midtown Retail operates a retail store in Kansas City, MO., and St. Louis, MO. The following information relates to the Kansas City facility: The store
Midtown Retail operates a retail store in Kansas City, MO., and St. Louis, MO. The following information relates to the Kansas City facility:
- The store sold 64,400 units at $19.00 each, after having purchased the units from various suppliers for $12.50. Kansas City salespeople are paid a 5% commission based on gross sales dollars.
- Kansas Citys sales manager oversees the placement of local advertising contracts, which totaled $57,000 for the year. Local property taxes amounted to $17,500.
- The sales manager's $68,000 salary is set by Kansas Citys store manager. In contrast, the store manager's $137,000 salary is determined by Midtowns vice president.
- Kansas City incurred $8,300 of other noncontrollable costs.
- Nontraceable (common) corporate overhead totaled $71,000.
Midtowns corporate headquarters is located in St. Louis, and the company uses responsibility accounting to evaluate performance.
Required:
Prepare a segmented income statement for the Kansas City store, being sure to disclose the segment contribution margin, the segment controllable profit margin, and segment profit margin.
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