Question 82 (a) ABC pic, a group operating retail stores, is compiling its budget statements for 2022. In this exercise revenues and costs at each store A, B and C are predicted. Additionally, all central costs of warehousing and a head office are allocated across the three stores in order to arrive at a total cost and net profit of each store operation In previous years the central costs were allocated in total based on the total sales value of each store. But as a result of dissatisfaction expressed by some store managers amative methods are to be evaluated The predicted results before any re-allocation of central costs are as follows: 000 Sales 5,000 4,000 Costs of sales 2,800 2,300 Gross margin 2,200 1,700 Local operating expe Vanabe 660 730 Fixed 700 600 Operating prof 840 370 310 The central costs which are to be allocated are 4000 Warehouse costs Depreciation 100 Operating and despatch 120 Delivery 300 200 Advertising 120 Total 1.000 The management accountant has carried out discussions with staff locations in order to identify more suitable 'cest anvers' of some of the central costs. So far, the following has been revealed: Number of despatches Total delivery detances (thousand miles) storage space occupied (%) 550 450 520 1 An analysis of senior management time revealed that 10% of their time was devoted to warehouse issues with the remainder shared equally between the three stores 2 It was agreed that the only basis on which to allocate the advertising Establishment costs were mainly occupancy costs of senior This analysis has been carried out against a background of developments in the company, for example, automated warehousing and greater integration (a) Calculate the budgeted net profit of each store based on the sales value [3] (b) Calculate the budgeted net profit of each store using the additional information provided [14] (c) Discuss the extent to which an improvement has been achieved in the [3] information now available to the company on the costs and profitability of running the stares