Midtown Retail operates a retail store in Kansas City, MO., and St. Louis, MO. The following information relates to the Kansas City facility: · The store sold 65,000 units at $18.00 each, after having purchased the units from various suppliers for $12.50. Kansas City salespeople are paid a 5% commission based on gross sales dollars.· Kansas City's sales manager oversees the placement of local advertising contracts, which totaled $54,000 for the year. Local property taxes amounted to $14,500.· The sales manager's $65,000 salary is set by Kansas City's store manager. In contrast, the store manager's $134,000 salary is determined by Midtown's vice president.· Kansas City incurred $6,800 of other noncontrollable costs.· Nontraceable (common) corporate overhead totaled $68,000.Midtown's
corporate headquarters is located in St. Louis, and the company uses responsibility accounting to evaluate performance.Required: Prepare a segmented income statement for the Kansas City store, being sure to disclose the segment contribution margin, the segment controllable profit margin, and segment profit margin.
What will be an ideal response?
| Sales Revenue (65,000 units × $18) | ? | $1,170,000 |
| Less Variable costs: | ? | ? |
| Cost of Goods sold (65,000 units × $12.50) | $812,500 | ? |
| Sales commissions ($1,170,000 × 5%) | 58,500 | 871,000 |
| Segment contribution margin | ? | $299,000 |
| Less traceable, controllable fixed costs: | ? | ? |
| Local advertising | $54,000 | ? |
| Sales manager's salary | 65,000 | 119,000 |
| Controllable profit margin | ? | $180,000 |
| Less Traceable, uncontrollable fixed costs: | ? | ? |
| Local property taxes | $14,500 | ? |
| Store manager's salary | 134,000 | ? |
| Other | 6,800 | 155,300 |
| Segment profit margin | ? | $24,700 |
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