Show-Off, Inc., sells merchandise through three retail outlets-in Las Vegas, Reno, and Sacramento-and operates ageneral corporate headquarters in Reno. A review of the company's income statement indicates a record year in termsof sales and profits. Management, though, desires additional insights about the individual stores and has asked thatJudson Wyatt, a newly hired intern, prepare a segmented income statement. The following information has beenextracted from Show-Off's accounting records:The sales volume, sales price, and purchase price data follow:Las VegasRenoSacramento37,000 units 41,000 units46,000 unitsSalesvolumeUnitselling $ 12.00priceUnitpurchase 5.50pricesalaryStore managersalariesOthernoncontrollableThe following expenses were incurred for sales commissions, local advertising, property taxes, management salaries,and other noncontrollable (but traceable) costs:costs$11.00Sales commissionsLocal advertising $11,000 $22,000Local property4,5002,000taxesSales manager5.50LasVegas31,0006%Variable operating expenses:RenoRequired Required Required123TotalSegment profit margin5,800 4,60039,000$ 9.506%TotalSegment contribution marginFixed expenses controllable by segmentmanager:6.00Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento isdetermined by the Sacramento store manager; in contrast, store manager salaries are set by Show-Off's vice president.• Nontraceable fixed corporate expenses total $192,300.The company uses a responsibility accounting system.SacramentoTotalProfit margin controllable by segment managerFixed expenses traceable to segment, butcontrollable by others: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?$48,0006,00032,00038,000Answer is not complete.Complete this question by entering your answers in the tabs below.17,800Assume the role of Judson Wyatt and prepare segmented income statement for Show-Off. (Roundyour answers to the nearest whole dollar.)6%Show-Off, Inc.$$$$$$LasVegas0 $0 $0 $0$0$0 $0 $0$0$0 $00$$RenoSacramento0 $0$0 $0 $0$0 $000000

An organizational segment's sales revenue, fixed expenses, and variable costs are linked to the…

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: Las Vegas Reno Sacramento 37,000 units 41,000 units 46,000 units Sales volume Unit selling $12.00 price Unit purchase. 5.50 price Sales manager salary Store manager salaries Other $ 11.00 noncontrollable 5.50 • The following expenses were incurred for sales commissions, local advertising, property taxes, management salaries, and other noncontrollable (but traceable) costs: costs Las Vegas Sales commissions Local advertising $11,000 $22,000 Local property 4,500 2,000 taxes 6% Reno $ 9.50 6% 31,000 39,000 5,800 4,600 6.00 Sacramento 6% $48,000 6,000 32,000 38,000 17,800 Local advertising decisions are made at the store manager level. The sales manager's salary in Sacramento is determined by the Sacramento store manager; in contrast, store manager salaries are set by Show-Off's vice president. • Nontraceable fixed corporate expenses total $192,300. • 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?

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 3MAD: The general merchandise retail industry has a number of segments represented by the following...