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Home / Questions / BUS 616Spring, 2016Assignment #3Place each part on a separate tab. Submit one excel file using the n

BUS 616Spring, 2016Assignment #3Place each part on a separate tab. Submit one excel file using the n

BUS 616Spring, 2016Assignment #3Place each part on a separate tab. Submit one excel file using the naming convention lastname.firstname.A3Suffolk, Inc. operates a chain of high-end home furnishing stores. Income statement for Central Division for the most recent year is as follows:SalesCOGSGross Margin 31,426,50016,341,78015,084,720 Selling Expense:CommissionsAdvertisingMarketing admin 3,142,6502,028,020138,516 Store Expense:OccupancyAdmin salariesSales salariesDepreciationMiscellaneous 1,075,3052,616,3231,855,144186,52042,605 Central Div Expense:SalariesOccupancyOtherGeneral 328,47073,42336,5982,514,120 ExpensesNet Income 14,037,6941,047,026 Sales commissions are paid at the same rate on all sales. "Central Division Expense" consists of costs directly related to operating the division headquarters, exceptthat "general" expense consists of corporate headquarters costs allocated among the divisions based on sales.Part 125 pointsCorporate headquarters also prepares income statements for each individual store. The Kansas City store is one of twelve stores in Central Division.Sales for the KC store were $2,685,500. The store’s gross margin percentage is 4 percentage points lower than the division as a whole.Company policy is to allocate advertising/marketing costs of the division equally among the stores in the division.Store expenses are all directly traceable to stores. The amounts for the KC store are:Occupancy86,436Admin salaries241,600Sales salaries136,250Depreciation22,200Miscellaneous4,623Central division expenses, including general, are allocated to stores based on sales.Prepare an income statement for the Kansas City store based on the above data and instructions.Part 235 pointsBecause the Kansas City store appears to have poor profit performance, headquarters is considering closing the store.Determine the actual profit/loss contribution of the store to the corporation, showing any necessary calculations.Advertising costs of $55,725 related directly to the KC market.Would you recommend closing the store? Explain.

 

Apr 17 2020 View more View Less

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