Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statementfor the company for the last quarter is given below:Superior Markets, IncorporatedIncome StatementFor the Quarter Ended September 30TotalSalesCost of goods soldGross marginSelling and administrative expenses:Selling expensesAdministrative expensesTotal expensesNet operating income (loss)North StoreSouth StoreEast Store$ 4,020,0002,220,648$ 964,800$ 1,608,000$ 1,447,200540,288884,400795,9601,799,352424,512723,600651,2401,094,780513,2201,608,000310,076422,100362,604142,040202,206168,974452,116624,306531,578$ 191,352$ (27,604)$ 99,294$ 119,662The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closingthe store. The company has asked you to make a recommendation as to whether the store should be closed or kept open. Thefollowing additional information is available for your use:

The objective of the question is to determine whether the North Store should be closed or kept open…

Answered: Superior Markets, Incorporated,…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 3CE

See similar textbooks

Similar questions

The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Additional data concerning the usage of the activities by the various customers are also provided: Required: (Note: Round answers to two decimal places.) 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? 2. Calculate a cost per account by customer category by using activity rates. 3. Currently, the bank offers free checking to all of its customers. The interest revenues average 90 per account; however, the interest revenues earned per account by category are 80, 100, and 165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Then calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. 4. CONCEPTUAL CONNECTION After the analysis in Requirement 3, a vice president recommended eliminating the free checking feature for low-balance customers. The bank president expressed reluctance to do so, arguing that the low-balance customers more than made up for the loss through cross-sales. He presented a survey that showed that 50% of the customers would switch banks if a checking fee were imposed. Explain how you could verify the presidents argument by using ABC.
The general merchandise retail industry has a number of segments represented by the following companies: For a recent year, the following cost of goods sold and beginning and ending inventories are provided from corporate annual reports (in millions) for these three companies: a. Determine the inventory turnover ratio for all three companies. Round all calculations to one decimal place. b. Determine the number of days sales in inventory for all three companies. Use 365 days and round all calculations to one decimal place. c. Interpret these results based on each companys merchandising concept.
Salespersons report and analysis Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. (Round whole percent to one digit after decimal point.) 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.
Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Superior Markets, IncorporatedIncome StatementFor the Quarter Ended September 30 Total North Store South Store East Store Sales $ 3,000,000 $ 720,000 $ 1,200,000 $ 1,080,000 Cost of goods sold 1,657,200 403,200 660,000 594,000 Gross margin 1,342,800 316,800 540,000 486,000 Selling and administrative expenses: Selling expenses 817,000 231,400 315,000 270,600 Administrative expenses 383,000 106,000 150,900 126,100 Total expenses 1,200,000 337,400 465,900 396,700 Net operating income (loss) $ 142,800 $ (20,600) $ 74,100 $ 89,300 The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or kept…
Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Superior Markets, IncorporatedIncome StatementFor the Quarter Ended September 30 Total North Store South Store East Store Sales $ 4,200,000 $ 1,008,000 $ 1,680,000 $ 1,512,000 Cost of goods sold 2,320,080 564,480 924,000 831,600 Gross margin 1,879,920 443,520 756,000 680,400 Selling and administrative expenses: Selling expenses 1,143,800 323,960 441,000 378,840 Administrative expenses 536,200 148,400 211,260 176,540 Total expenses 1,680,000 472,360 652,260 555,380 Net operating income (loss) $ 199,920 $ (28,840) $ 103,740 $ 125,020 The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store. The company has asked you to make a recommendation as to whether the store should be closed or…
Superior Markets, Inc., operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Superior Markets, Inc.Income StatementFor the Quarter Ended September 30 Total NorthStore SouthStore EastStore Sales $ 4,600,000 $ 920,000 $ 1,840,000 $ 1,840,000 Cost of goods sold 2,530,000 565,000 953,000 1,012,000 Gross margin 2,070,000 355,000 887,000 828,000 Selling and administrative expenses: Selling expenses 849,000 247,400 323,000 278,600 Administrative expenses 463,000 122,000 174,900 166,100 Total expenses 1,312,000 369,400 497,900 444,700 Net operating income (loss) $ 758,000 $ (14,400 ) $ 389,100 $ 383,300 The North Store has consistently shown losses over the past two years. For this reason, management is giving consideration to closing the store.…
Using the data below for Ace Guitar Company: Region A Region B Sales $753,500 $616,500 Cost of goods sold 286,300 234,300 Selling expenses 180,800 148,000 Service department expenses Purchasing $230,200 Payroll accounting 153,400 Allocate service department expenses proportionally to the sales of each region, determine the divisional income from operations for the Regions A and B. For interim calculations, round the percentages to one decimal place. Region A Region B
Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Superior Markets, Incorporated Income Statement For the Quarter Ended September 30 Total North Store South Store East Store Sales $ 3,960,000 $ 950,400 $ 1,584,000 $ 1,425,600 Cost of goods sold 2,187,504 532,224 871,200 784,080 Gross margin 1,772,496 418,176 712,800 641,520 Selling and administrative expenses: Selling expenses 1,078,440 305,448 415,800 357,192 Administrative expenses 505,560 139,920 199,188 166,452 Total expenses 1,584,000 445,368 614,988 523,644 Net operating income (loss) $ 188,496 $ (27,192) $ 97,812 $ 117,876 The North Store has consistently shown losses over the past two years, so management is considering closing this store. A detailed breakdown of the selling and administrative expenses shown above is as follows: Total North Store South Store East Store Selling…
Using the data below for the Ace Guitar Company: Sales Cost of goods sold Selling expenses Support department expenses: Purchasing Payroll accounting A Region A Region Operating Income B Region Operating Income $544,000 206,700 130,600 B Region $ $816,000 310,100 195,800 Allocate support department expenses proportional to the sales of each region. Determine the divisional operating income for the A and B regions. For interim calculations, round percentages to two decimal places and all other amounts to the nearest whole dollar. $228,500 152,300
Superior Markets, Incorporated, operates three stores in a large metropolitan area. A segmented absorption costing income statement for the company for the last quarter is given below: Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income (loss) Selling expenses: Sales salaries Direct advertising General advertising* Store rent Depreciation of store fixtures Delivery salaries Depreciation of delivery equipment Total selling expenses *Allocated on the basis of sales dollars. Administrative expenses: Store managers' salaries General office salaries* Superior Markets, Incorporated Income Statement For the Quarter Ended September 30 Insurance on fixtures and inventory Utilities Employment taxes General office-other* Total $ 3,000,000 1,657, 200 1,342,800 Total administrative expenses *Allocated on the basis of sales dollars. 817,000 383,000 1,200,000 $ 142,800 a. The breakdown of the selling…
Using the data below for the Ace Guitar Company: A Region B Region Sales $638,000 $522,000 Cost of goods sold 242,400 198,400 Selling expenses 153,100 125,300 Service department expenses Purchasing $194,900 Payroll accounting 129,900 Allocate service department expenses proportional to the sales of each region. Determine the divisional income from operations for the A and B regions. For interim calculations, round percentages to one decimal place. a) A Region b) B Region

SEE MORE QUESTIONS

Recommended textbooks for you

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

College Accounting, Chapters 1-27

Accounting

ISBN:

9781337794756

Author:

HEINTZ, James A.

Publisher:

Cengage Learning,

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Financial And Managerial Accounting

Accounting

ISBN:

9781337902663

Author:

WARREN, Carl S.

Publisher:

Cengage Learning,

Managerial Accounting

Accounting

ISBN:

9781337912020

Author:

Carl Warren, Ph.d. Cma William B. Tayler

Publisher:

South-Western College Pub

SEE MORE TEXTBOOKS