Kirsten, Inc

question 52

Essay

Kirsten, Inc. operates a chain of 80 retail stores throughout the Northwest that specializes in the sale of sports equipment. The following costs relate to store no. 19 in Seattle, Washington:
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.?

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Definitions:

Imports

Goods or services brought into a country from abroad for sale.

Expensive

Describing items or services that require a high financial outlay to purchase relative to their perceived value or compared to alternatives.

Weaker Peso

Refers to a decrease in the value of the peso, the national currency of some countries, against other currencies.

US Imports

Goods or services brought into the United States from other countries for sale or use.