Local advertising decisions are made at the store manager level. The sales manager''s salary in Savannah is determined by the Savannah store manager, in contrast, store manager salaries are set by Piedmont Noveltie''s vice president.
...Nontraceable fixed corporate expenses total $288,450
...The company uses a responsibility accounting system
Required:
1. Assume the role of Judson Wyatt and prepare a segmented income statement for Piedmont
2. Determine the weakest-performing store and present an analysis of the probable causes of poor performance
3. Assume that an opening has arisen at the Charlotte corporate headquarters and the company''s chief executive officer (CEO) desires to promote one of the three existing store managers. In evaluating the store manager''s performance, should the CEO use a store''s segment contribution margin, the profit margin controllable by the store manager, or a store''s segment profit margin? Justify your answer.