Excel Corporation has three divisions to service geographic areas across Canada: Vancouver, Montreal, and Toronto. Data for the company and for these divisions follow (in '000s).
Variable costs as a percentage of service revenue are: Vancouver, 16.67%; Montreal, 9%; and Toronto, 60%.
Required:
A. Complete the segmented income statement for Excel Corporation.
B. Evaluate the three segment managers for consideration of a pay raise. Base the managers' performance on an appropriate measure, and rank their performance with respect to absolute dollars and as a percentage of service revenue. What causes any difference in rankings between the two approaches?

Question

Excel Corporation has three divisions to service geographic areas across Canada: Vancouver, Montreal, and Toronto. Data for the company and for these divisions follow (in '000s).
  Variable costs as a percentage of service revenue are: Vancouver, 16.67%; Montreal, 9%; and Toronto, 60%.
Required:
A. Complete the segmented income statement for Excel Corporation.
B. Evaluate the three segment managers for consideration of a pay raise. Base the managers' performance on an appropriate measure, and rank their performance with respect to absolute dollars and as a percentage of service revenue. What causes any difference in rankings between the two approaches?

Quizplus · Accepted Answer

The Answer of Excel Corporation has three divisions to service geographic areas across Canada: Vancouver, Montreal, and Toronto. Data for the company and for these divisions follow (in '000s).
  Variable costs as a percentage of service revenue are: Vancouver, 16.67%; Montreal, 9%; and Toronto, 60%.
Required:
A. Complete the segmented income statement for Excel Corporation.
B. Evaluate the three segment managers for consideration of a pay raise. Base the managers' performance on an appropriate measure, and rank their performance with respect to absolute dollars and as a percentage of service revenue. What causes any difference in rankings between the two approaches?

Excel Corporation Has Three Divisions to Service Geographic Areas Across