Question
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
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 37,000 units $ 12.00 Reno 41,000 units $ 11.00 Sacramento 46,000 units $ 9.50 5.50 5.50 6.00 The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries, and other noncontrollable (but traceable) costs: Sales commissions Las Vegas 6% Reno Sacramento 6% 6% Local advertising $11,000 $ 22,000 $ 48,000 Local property taxes 4,500 2,000 Sales manager salary Store manager salaries 31,000 39,000 6,000 32,000 38,000 Other noncontrollable costs 5,800 4,600 17,800 Check
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