In Preparing for an Audit of the Retail Footwear Division

question 10

Multiple Choice

In preparing for an audit of the retail footwear division of a major retail organization,the auditor gathered the following information about the organization's stores: $$\begin{array} { l r r r r } & \text { All } & \text { Northeast } & \text { Southwest } & \text { Mid-Central } \\& \text { Stores } & \text { Region } & \text { Region } & \text { Region } \\& \$ 736,000 & \$ 840,000 & \$ 760,000 & \$ 630,000 \\\text { Average sales per store } & \$ 375,000 & \$ 420,000 & \$ 325,000 & \$ 395,000 \\\text { Average cost of goods sold per store } & 48 & 13 & 18 & 17 \\\text { Number of stores } & 1,800 & 2,200 & 1,850 & 1,550 \\\text { Average square feet per store } & \$ 137,000 & \$ 152,000 & \$ 140,000 & \$ 122,000 \\\text { Average sales per full-time employee } & \$ 98,000 & \$ 102,000 & \$ 82,000 & \$ 112,000 \\\text { Average wage related expense per store } & \$ 35,000 & \$ 285,000 & \$ 320,000 & \$ 115,000\end{array}$$ Which of the following statements is not correct regarding the auditor's further analysis?

• A)The Mid-Central Region has fewer average full-time equivalent employees per store than the other regions per store.
• B)The other regions all generate higher sales per square foot than the Mid-Central Region.
• C)The Mid-Central Region has the highest average wages per full-time equivalent employee.
• D)The largest contributor to total corporate profits is the Southwest Region.

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