$$Momo Nepalese food$$ makes and sells Momo through three restaurants in Sydney $($Townhall$,$ Rockdale and Lidcombe$).$ Momo corporate head office is located in Rockdale, in office space separate from its Rockdale store.

A review of Momo profit statement indicates a record year in terms of overall sales and profit. However, Momo$$ head office wants further information on individual store performance. Management has asked David Poudel, a newly hired accounting graduate, to prepare a profit statement that highlights profitability of each retail outlet. David initially extracted the following information from Momo$$s accounting records.

$$ Sales volume, sales price and purchase price data:

Townhall Rockdale Lidcombe

Sales volume $280002100018500$

Unit selling price $$11\mathrm{.}00$ $$9\mathrm{.}50$ $$9\mathrm{.}50$

Unit cost $$2\mathrm{.}30$ $$2\mathrm{.}50$ $$2\mathrm{.}75$

$$ The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries and other non$-$controllable $($but traceable$)$ costs:

T Townhall Rockdale Lidcombe

Sales commissions $1\%2\%2\%$

Local advertising $ $30000$ $ $15000$ $$20000$

Local property taxes $ $8000$ $ $3000$ $ $3500$

Assistant manager$$s salary $ $40000----$

Store manager$$s salary $ $60000$ $$55000$ $$52000$

Local advertising decisions are made at the store manager level. The assistant manager$$s salary at the Townhall store is determined by the store manager. In contrast, store managers$$ salaries are set by Momo$$ head office.

$$ Non$-$traceable fixed corporate expenses total $$108650.$

$$ The company uses a responsibility accounting system.

Required:

$1.$ Prepare a profit statement for Momo that shows the profitability of each retail store. $\{$ its hard for me to understand please explain this $\}$

$2.$ Determine the weakest performing store and discuss probable causes of the weakest store$$s poor performance.

$3.$ Assume that an opening has arisen at head office, and the company$$s CEO wants to promote one of the three existing store managers to the vacant position. Which of the following profit measures should the CEO use to evaluate each store manager$$s performance: contribution margin, profit margin controllable by the store manager, or a store$$s profit margin?