Parson, Inc. operates a chain of 80 retail stores throughout the Southeast that specializes in the sale of sports equipment. The following costs relate to store no. 19 in Atlanta, Georgia:
1. Salary of store manager: $58,000
2. Allocated corporate overhead: $55,000
3. Cost of goods sold: $2,560,000
4. Landscaping and grounds costs (yearly contract): $6,800
5. Hourly wages of sales clerks: $343,000
6. Local advertising (negotiated by store manager): $76,000
7. Property taxes: $25,800
8. Sales commissions: $221,000
Required:
A. Store no. 19's segment contribution margin?
B. Store no. 19's controllable profit margin?
C. Store no. 19's segment profit margin?
D. The net income of Parson, Inc.?

Question

Parson, Inc. operates a chain of 80 retail stores throughout the Southeast that specializes in the sale of sports equipment. The following costs relate to store no. 19 in Atlanta, Georgia:
1. Salary of store manager: $58,000
2. Allocated corporate overhead: $55,000
3. Cost of goods sold: $2,560,000
4. Landscaping and grounds costs (yearly contract): $6,800
5. Hourly wages of sales clerks: $343,000
6. Local advertising (negotiated by store manager): $76,000
7. Property taxes: $25,800
8. Sales commissions: $221,000
Required: 
A. Store no. 19's segment contribution margin?
B. Store no. 19's controllable profit margin?
C. Store no. 19's segment profit margin?
D. The net income of Parson, Inc.?

Quizplus · Accepted Answer

The Answer of Parson, Inc. operates a chain of 80 retail stores throughout the Southeast that specializes in the sale of sports equipment. The following costs relate to store no. 19 in Atlanta, Georgia:
1. Salary of store manager: $58,000
2. Allocated corporate overhead: $55,000
3. Cost of goods sold: $2,560,000
4. Landscaping and grounds costs (yearly contract): $6,800
5. Hourly wages of sales clerks: $343,000
6. Local advertising (negotiated by store manager): $76,000
7. Property taxes: $25,800
8. Sales commissions: $221,000
Required: 
A. Store no. 19's segment contribution margin?
B. Store no. 19's controllable profit margin?
C. Store no. 19's segment profit margin?
D. The net income of Parson, Inc.?