X More info Actual income statements Winnipeg Manitoba Companywide $ 148,100 $ 1,642,000 $ 4,400,000 $ $ Revenue Expenses: Region manager/headquarters office Cost of materials Salary expense Depreciation expense Utilities expense Rent expense Total expenses Operating income 81,100 38,400 7,600 4,600 2,300 56,000 $ 871,500 415,200 95,000 46,400 34,800 117,000 1,806,000 1,122,000 437,000 265,000 178,000 3,925,000 1,518,900 134,000 14,100 $ 123,100 $ 475,000 Print Done Budgeted amounts for July were as follows: Winnipeg Manitoba Companywide 163,100 $ 1,770,000 $ 4,650,000 $ $-$ Revenue Expenses: Region manager/headquarters office Cost of materials Salary expense Depreciation expense Utilities expense Rent expense Total expenses 86,200 38,500 7,600 4,700 3,500 61,600 $ 963,200 441,500 87,700 54,700 32,400 119,000 1,974,000 1,094,000 448,000 271,000 171,000 140,500 1,641,100 4,077,000 $ 22,600 $ 128,900 $ 573,000 Operating income Kitty World operates a chain of pet stores in the Prairies. The manager of each store reports to the regional manager, who, in turn, reports to headquarters in Regina. The actual income statements for the Winnipeg store, the Manitoba region (including the Winnipeg store), and the company as a whole (including the Manitoba region) for July are as follows: (Click the icon to view the actual income statements.) (Click the icon to view the budgeted income statements.) Requirements 1. Prepare a report for July that shows the performance of the Winnipeg store, the Manitoba region, and the company as a whole. 2. As the Manitoba region manager, would you investigate the Winnipeg store on the basis of this report? Why or why not? 3. Briefly discuss the benefits of budgeting. Base your discussion on Kitty World's performance report. C. Requirement 1. Prepare a report that shows the performance of the Winnipeg store, the Manitoba region and the company as a whole. We will begin with the company as a whole. (Use parentheses or a minus sign when entering the headquarters' expense and any unfavourable variances.) Kitty World Responsibility Accounting Performance Report July Companywide Variance Favourable (Unfavourable) Actual Budget Operating Income of Regions and Headquarters' Office Expense Headquarters' office expense Manitoba Stores in other regions Operating income Now prepare the report that shows the performance of the Manitoba region. (Use parentheses or a minus sign when entering the region manager's expense and any unfavourable variances.) Manitoba Operating Income of Stores and Region Manager's Office Expense Variance Favourable (Unfavourable) Actual Budget Region manager's office expense Winnipeg Other Manitoba stores Operating income Finally, show the performance of the Winnipeg store. (For variances with a zero balance, make sure to enter "0" in the appropriate cell. Use parentheses or a minus sign when entering any unfavourable variances.) Winnipeg Variance Favourable (Unfavourable) Revenues and Expenses: Actual Budget Revenue Expenses: Cost of materials Salary expense Depreciation expense Utilities expense Rent expense Total expenses Operating income Requirement 2. As the Manitoba region manager, would you investigate the Winnipeg store on the basis of this report? Why or why not? (Enter all amounts as positive. Round percentages to two decimal places, X.XX%.) V, is % of its budgeted income. This difference As region manager of the Manitoba region, you is investigating. The company investigate the Winnipeg office on the basis of this report. Its operating income variance of $, which is afford to keep operating marginally profitable stores. Requirement 3. Briefly discuss the benefits of budgeting. Base your discussion on Kitty World's performance report. Budgeting plan. The various levels of Kitty World's management their operations to develop the detailed budgets in the performance report. from the company headquarters to region managers, and from region managers to store managers and their staff. Budgeting coordination and communication. The budgets of the performance report communicate Budgets also help managers activities across the company's operations. Budgeting helps managers evaluate The budget versus actual comparisons in the report are better indicators of than current period actual amounts versus past period actual amounts. Budgeting also V to meet their budgets if budgets are the benchmark for measuring performance, and The Winnipeg store, other Manitoba stores, stores in other regions, and the headquarters will be Vaccept the budgets as fair. participation in the budgeting process helps ensure acceptance