test

Policy Finandals 0 Fa Type Vehide Notes 1 AOC Documents Reserve Worksheets Loss Details Plan of Actin Bockl (version 1) - Auto Recovered - Excel AutoSave Formulas Home Data View Page Layout Review O Search Help General ME X ta Calibri MAA== 2 Wap Text BIU.. A.A. Meige & Center Paste $ . % 948-23 Conditional Formats Cell Formatting Table Styles Shles Clipboard Fent Alignment G Number M67 - 2 B D E H M N O 1 2 3 4 5 6 7 8 Required information The following information applies to the questions displayed below Cathy's Classic Clothes (CCC) is a speciality workwear apparel store that targets primarily professional women CCC leases space for storefronts in popular malls and shopping centers, and the organizational structure consists of regions, districts, and stores. Each region consists of two or more districts, each district consists of three or more stores Each store, district, and region has been established as a profit center At all levels, the company uses a management by objective MBO) system and a responsibility accounting system that focuses on information and knowledge rather than blame and control Each year, managers, in consultation with their supervisors, establish goals which are not solely financial and these goals are integrated into the budget Actual performance is measured each month 9 10 11 12 13 14 15 16 17 18 19 20 21 The Northeast Region consists of Districts A and District A consists of three stores, 1, 2 and 3 with District consisting of three stores, 4.5 and 6 District A's performance has not been up to expectations in the past for the month of May, the district manager has set performance goals with the managers of Stores 1 and 2 who will receive bonuses if certain performance measures are exceeded. The manager of Store 3 decided not to participate in the bonus scheme. Since the district manager is unsure what type of bonus will encourage better performance, the manager of Store I will receive a bonus based on sales in excess of budgeted sales of $570,000 while the manager of Store 2 will receive a bonus based on net income in excess of budgeted net income The company's net income goal for each store is 12 percent of sales The budgeted sales for Store 2 are $530,000 Other pertinent data for the month of May 2013 are given below Sheet2 hp 12 13 0 14 15 16 GO 17 Da FB 19 O 10 91 2 %23 3 $ 4 %6 5 19 VA 6 & 7 8 C 9 de Q W E R T 14 Y U 5 6 - 0 P A S D TI G H 2 3 N X C V B 0 Z M alt Parties involved Policy Finandals Exposures Notes 1 Veh AOC Documents Reserve Worksheets Loss Details Plan of Action AutoSave Bookl (version 1) . AutoRecovered - Excel Fie Home Insert Page Layout Formulas Data Review View Help Search Calibri Wrap Text General Paste BTU- a. A EES + Merge Center - $ - % 98 Conditional Format as Cell Formatting Table Styles Styles Clipboard Font Alignment Number M67 23 24 25 26 27 28 B D K M Fryzuryvos. TYTTUTTO Currouy curry verrucov At Store 1, sales are 40 percent of District A sales while sales at Store 2 are 35 percent of District A sales. The cost of goods sold at both Stores 1 and 2 is 42 percent of sales. Variable selling expenses (sales commissions) are 6 percent of sales for all stores, districts, and regions. Variable administrative expenses are 2.5 percent of sales for all stores, districts, and regions Maintenance cost includes janitorial and repair services and is a direct cost for each store. The store manager has complete control over this outlay: however, this cost should not be below one percent of sales Advertising is considered a direct cost for each store and is completely under the control of the store manager Store 1 spent two thirds of District A's total outlay for advertising which was ten times more than Store 2 spent on advertising The rental expenses at Store 1 are 40 percent of District A's total while Store 2 incurs 30 percent of District A's total. District expenses are allocated to the stores based on sales Other relevant information . 30 36 Store 1 312 Store 2 38 39 40 Sales Cost of goods sold Store Maintenance Advertising Rent and other casts District expenst Regional expenses District $ 1,500,000 633,750 12,600 75.000 150,000 180,000 165,00 7,500 600 41 42 55.00 55.000 Required: Sheet1 Sheet2 hp 12 0 14 16 GO 17 18 19 no 23 a 111 # % 2 $ 4 2 3 8 191 5 6 & 7 8 9 Q W E R T Y 4 U 5 o A S D F G H J K Calibri - 11 - A = = BIU.LaA. Paste Wrap Text # E Merge & Center Clipboard Font Alignment M67 B F G H K 446 47 48 49 50 51 52 53 54 Cathy's Classic Clothes Northeast Region Performance Report May 2013 District A Store 1 Store 2 56 57 58 59 60 61 62 Sales Cost of goods sold Gross margin 55 Operating expenses Variable selling Variable administration Other direct expenses Store maintenance Advertising Rent and other costs 63 District expense (allocated) Regional expenses (given) 65 Total expenses 66 Net Income 54 68 2. Does the responsibility accounting system and bonus structure have a positive impact on: 69 a) The financial results for Store 1? Provide at least 1 reason to support your response 70 b) The financial results for Store 2? Provide at least 1 reason to support your response 71 (Please ensure your response is written in your own words and clearly labelled for Parts 2a and 26) Sheet1 Sheet2 e IRSA f f2 f3 f4 a u f6 f7 1 # 2 $