The following fixed expenses are controllable at the store level: Depreciation for furnitures, IT services, warehouse and insurance.

The following fixed expenses are traceable to divisions or stores, but controllable only at the company level: Depreciation for buildings, property

taxes and store supervisor wages. Mr&Mrs Australia Ltd. incurs common fixed expenses of $8.400,000 which are not allocated to the two

diViSIONS.

1. Pepare a performance report using the contribution margn format to show the total profitability for the company, the profitability for the two

stores that are part of the Sydney division, and the profitability of the Melbourne division as a whole.

2. As your role of a management accountant, explain to the managing director on how this report could be used to manage the company