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Contribution Income Statement for Profit Centers Glamour, Inc., is an upscale clothing store in New York City and London. Each store has two main departments, Men's Apparel and Women's Apparel. Marie Phelps, Glamour's CFO, wants to use strategic performance measurement to bet- ter understand the company's financial results. She has decided to use the profit centers method to measure performance and has gathered the following information about the two stores and the two departments of the New York City store:
Total net sales
$2,250,000
Fixed costs
Partly traceable and controllable
200,000
Partly traceable but non-controllable
160,000
Non-traceable costs
55,000
Total net sales (percent)
London Store
40%
New York-Men's Apparel
30
New York-Women's Apparel
70
Cost of goods sold-variable (percent of sales)
London
55%
60
40
Variable operating costs (percent of sales)
34%
24
Fixed controllable costs-partly traceable (percent of total)
New York total
Men's Apparel
45
Women's Apparel
Could not be traced to Men's or Women's apparel
15
Could not be traced to New York or London
20
Fixed non-controllable costs-partly traceable (percent of total)
50%
10
Could not be traced to London or New York
Required
1. Using this information and a spreadsheet system, prepare a contribution income statement for Glamour, showing contribution margin, controllable margin, and contribution by profit center (CPC) for both the London and New York stores and for both departments of the New York store.
2. What are the global issues that are an important part of the profit center evaluation for Glamour Inc.?
Which of the following methods accounts for 100% of the services that occur between service departments?
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