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Income statement by segments using the contribution approach
Breakdown into Two Divisions Colorado Spring 3,600 2,250 270 2,520 1,080 334 746 395 351 125 125 Breakdown of Denver Div. Breakdown of Colorado Spring Div. Not Not Alllocat Alllocate Downtown Plaza Airport ed Downtown Littleton d

Company as a whole 3 4 net sales ( 5 variable cost 6 7 8 9 CM 6,000 COGS Var. operating expenses Total variable costs 3,750 480 4,230 1,770 488 1,282 604 678 78

Denver

2,400 1,500 210 1,710 690 154 536 209 327

1,800 1,125 180 1,305 495 94 401 56 345

600 375 30 405 195 60 135 28 107 187 187

1,800 1,125 180 1,305 495 94 401 52 349

900 563 45 608 293 120 173 78 95

900 563 45 608 293 120 173 78 95

TRUE TRUE

TRUE

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Less: fixed cost controllable by store managers CM controllable by store managers Less: fixed cost controllable by others Contribution by segment Less: unallocated costs (general corporate expenses) Income before tax (

TRUE

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600 (600,000 USD)

(Note) Gross margin percentage( =COGS/ 0.625 Unit: thousands of $ Not allocated fixed cost controllable by others: 22 Controllable by div.managers & ad.staff (Conclusions) 23 24 Colorado Spring contributes more than Denver 25 Among all stores, Downtown stores perfomed best. 26 Although bringing in the least revenue to the company, Littleton has bigger contribution than Plaza and The reason may be Plaza & Airport are newer and better-equipped 27 stores than Littleton so Dep, rental & utilitites(fixed cost) are higher

1/11/2012

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