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PERFORMANCE REPORT FOR PROFIT CENTERS Watson Clothiers, a retailer specializing in men's and ladies' career clothing, has stores in two Ohio cities: Cincinnati and Columbus. These stores are evaluated as profit centers. Sales and direct costs for the stores in 20x7were as follows: Cincinnati $220,000 80,000 32,000 16,000 1,000 Net sales Cost of goods sold Sales salaries Property taxes, utilities, and depreciation Miscellaneous operating expense General Administration Personnel and Payroll Advertising The following indirect costs were incurred by service departments at Watson Clothiers during 20x9 Personnel and Payroll Advertising Columbus $380,000 152,000 $83,000 49,000 67,000 % used by Cincinnati 40% 25% 45,000 19,000 2,000 Store managers can control the services used from the Personnel and Payroll and the Advertising departments, based on hiring and marketing decisions. They cannot control services provided by General Administration. Use of service department resources in 20x9 was as follows: % used by Columbus 60% 75% Required: Prepare divisional income statements for Watson Clothiers, showing each store's income from operations. In accordance with responsibility accounting, include only controllable revenues and controllable expenses.

PERFORMANCE REPORT FOR PROFIT CENTERS Watson Clothiers, a retailer specializing in men's and ladies' career clothing, has stores in two Ohio cities: Cincinnati and Columbus. These stores are evaluated as profit centers. Sales and direct costs for the stores in 20x7were as follows: Cincinnati $220,000 80,000 32,000 16,000 1,000 Net sales Cost of goods sold Sales salaries Property taxes, utilities, and depreciation Miscellaneous operating expense General Administration Personnel and Payroll Advertising The following indirect costs were incurred by service departments at Watson Clothiers during 20x9 Personnel and Payroll Advertising Columbus $380,000 152,000 $83,000 49,000 67,000 % used by Cincinnati 40% 25% 45,000 19,000 2,000 Store managers can control the services used from the Personnel and Payroll and the Advertising departments, based on hiring and marketing decisions. They cannot control services provided by General Administration. Use of service department resources in 20x9 was as follows: % used by Columbus 60% 75% Required: Prepare divisional income statements for Watson Clothiers, showing each store's income from operations. In accordance with responsibility accounting, include only controllable revenues and controllable expenses.

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter25: Departmental Accounting
Section: Chapter Questions
Problem 9SPA: INCOME STATEMENT WITH DEPART MENTAL DIRECT OPERATING MARGIN AND TOTAL OPERATING INCOME Durwood...
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PERFORMANCE REPORT FOR PROFIT CENTERS Watson Clothiers, a retailer specializing in men's and ladies' career clothing, has stores in two Ohio cities: Cincinnati and Columbus. These stores are evaluated as profit centers. Sales and direct costs for the stores in 20xwere as follows: Net sales Cost of goods sold Sales salaries Property taxes, utilities, and depreciation Miscellaneous operating expense General Administration Personnel and Payroll Advertising Cincinnati $220,000 80,000 32,000 16,000 1,000 The following indirect costs were incurred by service departments at Watson Clothiers during 20x9 Personnel and Payroll Advertising Columbus $380,000 152,000 45,000 19,000 2,000 $83,000 49,000 67,000 Store managers can control the services used from the Personnel and Payroll and the Advertising departments, based on hiring and marketing decisions. They cannot control services provided by General Administration. Use of service department resources in 2009 was as follows: % used by Cincinnati % used by Columbus 40% 60% 25% 75% Required: Prepare divisional income statements for Watson Clothiers, showing each store's income from operations. In accordance with responsibility accounting, include only controllable revenues and controllable expenses. Only Controballe Revenues -
Transcribed Image Text:PERFORMANCE REPORT FOR PROFIT CENTERS Watson Clothiers, a retailer specializing in men's and ladies' career clothing, has stores in two Ohio cities: Cincinnati and Columbus. These stores are evaluated as profit centers. Sales and direct costs for the stores in 20xwere as follows: Net sales Cost of goods sold Sales salaries Property taxes, utilities, and depreciation Miscellaneous operating expense General Administration Personnel and Payroll Advertising Cincinnati $220,000 80,000 32,000 16,000 1,000 The following indirect costs were incurred by service departments at Watson Clothiers during 20x9 Personnel and Payroll Advertising Columbus $380,000 152,000 45,000 19,000 2,000 $83,000 49,000 67,000 Store managers can control the services used from the Personnel and Payroll and the Advertising departments, based on hiring and marketing decisions. They cannot control services provided by General Administration. Use of service department resources in 2009 was as follows: % used by Cincinnati % used by Columbus 40% 60% 25% 75% Required: Prepare divisional income statements for Watson Clothiers, showing each store's income from operations. In accordance with responsibility accounting, include only controllable revenues and controllable expenses. Only Controballe Revenues -
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