Show-Off, Inc. sells merchandise through three retail outlets in Las Vegas, Reno, and Sacramento-and operates a general corporate headquarters in Reno. A review of the company's income statement indicates a record year in terms of sales and profits. Management, though, desires additional insights about the individual stores and has asked that Judson Wyatt, a newly hired intern, prepare a segmented income statement. The following information has been extracted from Show-Off's accounting records: The sales volume, sales price, and purchase price data follow: Sales volume Unit selling price Unit purchase price Las Vegas 38, 100 units $ 29.00 13.75 Reno 42,100 units $ 27.50 13.75 Sacramento 46,440 units 25.25 17.25 $ The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries, and other noncontrollable (but traceable) costs: Sacramento 7% Las Vegas 7% $ 17,600 7,300 Reno 75 $ 38,500 3,550 Sales commissions Local advertising Local property taxes Sales manager salary Store manager salaries Other noncontrollable costs $ 105,000 12,300 64,500 79,000 37,700 52,000 9,800 69,500 7,450 Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is determined by the Sacramento store manager: in contrast, store manager salaries are set by Show-Off's vice president Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is determined by the Sacramento store manager; in contrast, store manager salaries are set by Show-Off's vice president. - Nontraceable fixed corporate expenses total $343,450. - The company uses a responsibility accounting system. Required: 1. Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off. 2. Identify the probable causes for the poor performance of the weakest store. 3. Which of the following should be reviewed in evaluating the performance of the store manager? Required 1 Required 2 Required 3 Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off. (Round your answers to the nearest whole dollar.) Show-Off, Inc. Las Vegas Reno Sacramento Sales revenue Variable operating expenses: Sales commissions $ 0 $ 0 $ $ $ $ $ Total Segment contribution margin Fixed expenses controllable by segment manager: Local advertising Sales manager salary 0 $ 0 $ $ $ 0 0 $ $ Total Profit margin controllable by segment manager Fixed expenses traceable to segment, but controllable by others: Store manager salaries Sales manager salary 0 0 $ $ 0 0 $ $ 0 0 $ $ $ Total Profit margin controllable by segment manager Fixed expenses traceable to segment, but controllable by others: Store manager salaries Total Segment profit margin 0 0 $ $ 0 0 $ $ 0 0 $ $ Operating income 0 Required 1 Required 2 >
