Question
Show-Off, Inc., sells merchandise through three retail outletsin Las Vegas, Reno, and Sacramentoand operates a general corporate headquarters in Reno. A review of the companys
Show-Off, Inc., sells merchandise through three retail outletsin Las Vegas, Reno, and Sacramentoand operates a general corporate headquarters in Reno. A review of the companys 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-Offs accounting records: The sales volume, sales price, and purchase price data follow: Las Vegas Reno Sacramento Sales volume 37,800 units 41,800 units 46,320 units Unit selling price $ 26.00 $ 24.50 $ 22.25 Unit purchase price 12.25 12.25 15.00 The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries, and other noncontrollable (but traceable) costs: Las Vegas Reno Sacramento Sales commissions 8 % 8 % 8 % Local advertising $ 17,300 $ 37,000 $ 96,000 Local property taxes 7,150 3,400 11,400 Sales manager salary 60,000 Store manager salaries 50,500 66,500 73,000 Other noncontrollable costs 9,500 7,300 34,700 Local advertising decisions are made at the store manager level. The sales managers salary in Sacramento is determined by the Sacramento store manager; in contrast, store manager salaries are set by Show-Offs vice president. Nontraceable fixed corporate expenses total $328,450. The company uses a responsibility accounting system.
Required: 1. Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off.
Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off. (Round your answers to the n dollar.) Show-Off, Inc. Las Vegas Reno Sacramento Sales revenue Variable operating expenses: Sales commissions Cost of goods sold $ 0 $ 0 $ 0 0 $ $ $ 0 $ 0 $ 0 0 Total Segment contribution margin Fixed expenses controllable by segment manager: Local advertising Sales manager salary $ 0 $ 0 0 $ $ olo $ $ $ 0 $ 0 0 Total Profit margin controllable by segment manager Fixed expenses traceable to segment, but controllable by others: Local property taxes Other noncontrollable costs Store manager salaries Total $ 0 $ 0 $ 0 0 $ $ $ 0 $ 0 $ 0 0 Segment profit margin Common fixed expenses Operating income $ 0 Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off. (Round your answers to the n dollar.) Show-Off, Inc. Las Vegas Reno Sacramento Sales revenue Variable operating expenses: Sales commissions Cost of goods sold $ 0 $ 0 $ 0 0 $ $ $ 0 $ 0 $ 0 0 Total Segment contribution margin Fixed expenses controllable by segment manager: Local advertising Sales manager salary $ 0 $ 0 0 $ $ olo $ $ $ 0 $ 0 0 Total Profit margin controllable by segment manager Fixed expenses traceable to segment, but controllable by others: Local property taxes Other noncontrollable costs Store manager salaries Total $ 0 $ 0 $ 0 0 $ $ $ 0 $ 0 $ 0 0 Segment profit margin Common fixed expenses Operating income $ 0Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started