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Show-Off, Inc., sells merchandise through three retail outlets-in Las Vegas, Reno, and Sacramento-and operates a general corp headquarters in Reno. A review of the
Show-Off, Inc., sells merchandise through three retail outlets-in Las Vegas, Reno, and Sacramento-and operates a general corp headquarters in Reno. A review of the company's Income statement indicates a record year in terms of sales and profits. Manager 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 38,700 units $ 35.00 16.75 Reno 42,700 units $ 33.50 16.75 Sacramento 46,680 units $ 31.25 21.75 The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries, and othe noncontrollable (but traceable) costs: Sales commissions Las Vegas 5% Reno 5% Sacramento 5% Local advertising $18,200 Local property taxes 7,600 $41,500 3,850 $123,000 14,100 Sales manager salary 73,500 Store manager salaries 55,000 75,500 91,000 Other noncontrollable costs 10,400 7,750 43,700 Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is determined by th Sacramento store manager; In contrast, store manager salaries are set by Show-Off's vice president. Nontraceable fixed corporate expenses total $373,450. The company uses a responsibility accounting system. Required: 1. Assume the role of Judson Wyatt and prepare a segmented income statement for Show-Off.
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