Jeeves St Laurent Is an Upscale Men's Clothing Store That Operates

Jeeves St. Laurent is an upscale men's clothing store that operates throughout British Columbia. The company, which has three divisions (Kelowna, Victoria, and Vancouver), reported the following information for the year just ended (in thousands): $\begin{array} { l c c c } & \text { Kelowna } & \text { Victoria } & \text { Vancouver } \\\text { Sales revenue } & \$ 8,000 & \$ 7,000 & \$ 6,000 \\\text { Divisional contribution margin } & 7,400 & 5,400 & 3,400 \\\text { Profit margin controllable by division } & 1,600 & 2,000 & 1,000 \\\text { manager } & 900 & 600 & 300\end{array}$ Jeeves St. Laurent also reported $800 of common fixed expenses that top management wants to allocate to the divisions on the basis of sales revenue. As the company's CEO notes, "Each division helped to incur a portion of these costs and, as a result, each should absorb its fair share." The firm has adopted various responsibility accounting procedures to evaluate the division personnel.
Required:
A. Compute the company's total sales revenue.
B. Calculate the amount of variable operating expense incurred by the Victoria Division.
C. Calculate the fixed costs controllable by Kelowna's management.
D. Calculate the fixed costs traceable to the Vancouver Division but controllable by others.
E. Jeeves St. Laurent desires to promote a division manager to the corporate office to oversee selected operations. In determining which individual to promote, should Jeeves St. Laurent's top management focus on the profit margin controllable by the division manager or the overall divisional profit margin? Briefly explain.