Problem 18-51 (Algo) Contribution Income Statement; Spreadsheet Application [LO 18-3]
Fashionisto Incorporated is an upscale clothing store in New York City and London. Each store has two main departments, Men's
Aparel and Women's Apparel. Marie Phelps, Fashionisto's CFO, wants to use strategic performance measurement to better
understand the company's financial results. She has decided to use the profit center 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
Fixed costs
Nontraceable
costs
$ 4,100,000
Partly traceable and controllable
Partly traceable but noncontrollable
Total net sales (percent)
London store
New York store
New York-Men's Apparel
New York-Women's Apparel
Cost of goods sold-variable (percent of sales)
London store
New York-Men's Apparel
280,000
250,000
100,000
48%
68
48
68
52%
45
New York-Women's Apparel
68
Variable operating costs (percent of sales)
London store
36%
New York-Men's Apparel
22
New York-Women's Apparel
32
Fixed controllable costs-partly traceable (percent of total)
London store
40%
New York total
48
Men's Apparel
45
Women's Apparel
48
Could not be traced to Men's or Women's Apparel
15
Could not be traced to London or New York
28
Fixed noncontrollable costs-partly traceable (percent of total)
London store
50%
New York total
48
Men's Apparel
35
Women's Apparel
15
Could not be traced to Men's or Women's Apparel
Could not be traced to London or New York
Required:
1. Using this information, prepare a contribution income statement for Fashionisto.
COGS
Variable cost
Combined
Company
Not Allocated London Store
New York
Store
Not allocated Men's wear Women's wear
Total variable cost
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0 S
0 S
0
S
0
58
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