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 37,900 units 41,900 units 46,360 units Unit selling price $ 27.00 $ 25.50 $ 23.25 Unit purchase price 12.75 12.75 15.75 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 5 % 5 % 5 % Local advertising $ 17,400 $ 37,500 $ 99,000 Local property taxes 7,200 3,450 11,700 Sales manager salary 61,500 Store manager salaries 51,000 67,500 75,000 Other noncontrollable costs 9,600 7,350 35,700 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 $333,450. 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?