B-22.03 Problem

B-22.03 Problem - B-22.03 Printers Plus is a retailer of...

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Unformatted text preview: B-22.03 Printers Plus is a retailer of printers and ink cartridges. The printers carry a low profit margin and the ink cartridges a very high margin. Following is an aggregated budgeted performance plan for 20X5. Budgeted Performance Report All Stores For the Year Ending December 31, 20X5 Sales Printers Cartridges Total sales Less: Variable expenses Printers Cartridges Total ariable xpenses Total variable expenses Contribution margin Traceable fixed costs Location margin Common fixed costs Stores margin $ $ $ $ 4,500,000 4,500,000 9,000,000 4,000,000 1,500,000 5,500,000 ,500,000 $ 3,500,000 1,550,000 $ 1,950,000 1,400,000 550,000 $ Although total sales met expectations for the year, management is upset that the targeted margins were not achieved. Following is the "store by store" actual performance report. Evaluate the detailed data and write a paragraph explaining the loss. If each store has a postive margin, as shown in the following report, why is management upset? 1 of 2 B-22.03 Actual Performance Report All Stores For the Year Ending December 31, 20X5 Store A Sales Printers Cartridges Total sales Less: Variable expenses Printers Cartridges Total variable Total variable expenses Contribution margin Traceable fixed costs Location margin $ $ $ $ $ $ 2,000,000 500,000 2,500,000 Store B $ $ 1,777,778 166,667 1,944,444 $ 555,556 450,000 105,556 $ $ $ Store C 2,500,000 2,000,000 4,500,000 $ 2,222,222 666,667 2,888,889 $ 1,611,111 600,000 1,011,111 $ $ $ $ 1,000,000 1,000,000 2,000,000 888,889 333,333 1,222,222 777,778 500,000 277,778 2 of 2 ...
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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B-22.03 Problem - B-22.03 Printers Plus is a retailer of...

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