visno Required information[The following information applies to the questions displayed below.]Cardio World Inc. (CWI) is a sporting goods retailer that specializes in bicycles, running shoes, and related clothing. Thefirm has become successful by careful attention to trends in cycling, running, and changes in the technology and fashionof sport clothing. In recent years, however, the profit margins have begun to fall, and CWI has decided to employ acontribution income statement to further analyze the company's profitability. The company has two stores, one in Hartford,Connecticut, and the other in Boston, Massachusetts. The total sales for the two stores for the most recent year are$7,020,000 and $5,870,000 for the Hartford and Boston stores, respectively. Both stores are considered profit centers,and within each store are two profit centers: one for clothing and the other for cycle and running shoes (called "cycle &run" below). The breakdown of sales within the two stores is approximately 50% clothing and 50% cycle & run for Bostonbut is estimated to be 60% / 40% for Hartford due to the greater interest in cycling in the Boston area. CWI is interested infinding the profit contribution of clothing and cycle & run at the Hartford store but not at the Boston store.Cost of purchases for resale averages 60% of retail value at Boston; at Hartford, the cost is 70% for clothing and 50% forcycle & run. Variable operating costs at each store are similar: 30% of retail sales at Boston, and at Hartford, variableoperating costs are 25% of retail sales for the clothing unit and 35% for the cycle & run unit. CWI estimates it has a total of$1,175,000 fixed cost, of which $335,000 cannot be traced to either store; of the remaining $840,000, $470,000 istraceable to the stores and controllable by store managers, and $370,000 can be traced to the stores but cannot becontrolled in the short term by the store managers. These fixed costs are estimated to be traceable to the stores asfollows:Fixed Controllable CostsBostonHartford totalClothingCycle & runCould not be traced to clothing or cycling at HartfordCould not be traced to Boston or HartfordFixed Noncontrollable CostsBostonHartford totalClothingCycle & runCould not be traced to clothing or cycling at HartfordCould not be traced to Boston or HartfordNet salesVariable costsCOGSRequired:1. Prepare a contribution income statement for CWI showing the contribution margin, controllable margin, and contribution by profitcenter for both the Boston and Hartford stores, and also for the clothing and cycle & run units of the Hartford store.Total variable costsContribution marginLess: Controllable fixed costsControllable marginLess: Noncontrollable fixed costsContribution by profit centerLess: Nontraceable costsOperating income›✓3333333CombinedCompany$00NotAllocated0 $00 $BostonX Answer is not complete.0Percent ofTotal Cost45%45503020100Percent ofTotal Cost40%50553510100$Hartford000NotAllocated$0$Clothing000$Cycle &Run000

Contribution Margin:Contribution margin is a measure of the amount of the revenue left over after…

Cardio World Inc. (CWI) is a sporting goods retailer that specializes in bicycles, running shoes, and related clothing. The firm has become successful by careful attention to trends in cycling, running, and changes in the technology and fashion of sport clothing. In recent years, however, the profit margins have begun to fall, and CWI has decided to employ a contribution income statement to further analyze the company's profitability. The company has two stores, one in Hartford, Connecticut, and the other in Boston, Massachusetts. The total sales for the two stores for the most recent year are $7,020,000 and $5,870,000 for the Hartford and Boston stores, respectively. Both stores are considered profit centers, and within each store are two profit centers: one for clothing and the other for cycle and running shoes (called "cycle & run" below). The breakdown of sales within the two stores is approximately 50% clothing and 50% cycle & run for Boston but is estimated to be 60% / 40% for Hartford due to the greater interest in cycling in the Boston area. CWI is interested in finding the profit contribution of clothing and cycle & run at the Hartford store but not at the Boston store.

Cardio World Inc. (CWI) is a sporting goods retailer that specializes in bicycles, running shoes, and related clothing. The firm has become successful by careful attention to trends in cycling, running, and changes in the technology and fashion of sport clothing. In recent years, however, the profit margins have begun to fall, and CWI has decided to employ a contribution income statement to further analyze the company's profitability. The company has two stores, one in Hartford, Connecticut, and the other in Boston, Massachusetts. The total sales for the two stores for the most recent year are $7,020,000 and $5,870,000 for the Hartford and Boston stores, respectively. Both stores are considered profit centers, and within each store are two profit centers: one for clothing and the other for cycle and running shoes (called "cycle & run" below). The breakdown of sales within the two stores is approximately 50% clothing and 50% cycle & run for Boston but is estimated to be 60% / 40% for Hartford due to the greater interest in cycling in the Boston area. CWI is interested in finding the profit contribution of clothing and cycle & run at the Hartford store but not at the Boston store.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter13: The Balanced Scorecard: Strategic-based Control

Section: Chapter Questions

Problem 13E: Bannister Company, an electronics firm, buys circuit boards and manually inserts various electronic...

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