Kasten Incorporated operates a chain of retail stores throughout the Northwest that specializes in the sale of sports equipment. The following costs relate to Store No. 19 located in Burnaby, British Columbia:
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:
Which of the preceding costs would be used in computing:
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 Kasten, Inc.?

Question

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The Answer of Kasten Incorporated operates a chain of retail stores throughout the Northwest that specializes in the sale of sports equipment. The following costs relate to Store No. 19 located in Burnaby, British Columbia:
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:
Which of the preceding costs would be used in computing:
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 Kasten, Inc.?

Kasten Incorporated Operates a Chain of Retail Stores Throughout the Northwest