Please answer 2 of the 3 questions. Please provide answers in excel or word format. Thanks ATTACHMENT PREVIEW Download attachment 8 pages HW7.pdf B-22.03 Evaluating performance reports Printers Plus is a retailer of printers and ink cartridges. The printers carry a low profit margin and the ink cartridges a very high margin. Following is an aggregated budgeted performance plan for 20X5. Spreadsheet fx A B C D E F Budgeted Performance Report All Stores For The Year Ending December 31, 20X5 1 2 3 Sales: 4 Printers $4,500,000 5 Cartridges ?4,500,000 6 Total sales $9,000,000 7 8 9 10 Less variable expenses: Printers $4,000,000 Cartridges ?1,500,000 Total variable expenses $5,500,000 13 Contribution margin $3,500,000 14 Traceable fixed costs ?1,550,000 15 Location margin $1,950,000 16 Common fixed costs ?1,400,000 17 Stores margin $??550,000 11 12 18 Although total sales met expectations for the year, management is upset that the targeted margins were not achieved. Following is the "store by store" actual performance report. Evaluate the detailed data and write a paragraph explaining the loss. If each store has a positive margin, as shown in the report on the following page, why is management upset? Spreadsheet fx A C D Actual Performance Report All Stores For The Year Ending December 31, 20X5 1 Store A 2 3 B Store B Store C Sales: 4 Printers $2,000,000 $2,500,000 $1,000,000 5 Cartridges ??? 500,000 ?2,000,000 ?1,000,000 $2,500,000 $4,500,000 $2,000,000 Printers $1,777,778 $2,222,222 $??888,889 Cartridges ??? 166,667 ??? 666,667 ??? 333,333 Total variable expenses $1,944,444 $2,888,889 $1,222,222 13 Contribution margin $??555,556 $1,611,111 $??777,778 14 Traceable fixed costs ??? 450,000 ??? 600,000 ??? 500,000 15 Location margin $??105,556 $1,011,111 $??277,778 6 Total sales 7 8 9 10 11 Less variable expenses: 12 16 E ???? ?? ?? ???? ? ??? B-23.07 Residual income Sherwin Corporation has three business segments: paint, wallpapers, and tools. The company’s assumed cost of capital is 10%. Financial information about each segment follows: Paint segment Segment operating income Invested capital (a) Wallpaper segment Tools segment $??650,000 $??475,000 $??900,000 6,500,000 3,500,000 7,500,000 Prepare an analysis of residual income for each segment, and note which segment has the highest residual income. I-23.03 Evaluating the elimination of a segment Samstrun Electronics Store has three major departments: computers, televisions, and appliances. The appliance department has been a consistent money loser, as typified by the following recent monthly operating report: Total Computers TVs Appliances Sales $2,550,000 $750,000 $1,200,000 $600,000 Variable expenses ?2,100,000 ?600,000 ?1,000,000 ?500,000 Contribution margin $??450,000 $150,000 $??200,000 $100,000 Fixed expenses ???305,000 ?100,000 ????80,000 ?125,000 Income (loss) $??145,000 $?50,000 $??120,000 $( 25,000) Management is considering a strategy to exit the appliance business. If this strategy is followed, the floor space currently dedicated to appliances will be used to expand the television showroom space. It is believed that television sales will increase by 40%. Fixed expenses that can be eliminated by abandoning appliance sales include the salary of a service tech and the lease of a delivery van. The two components total $10,000 per month. The remaining fixed costs relate to facilities expenses and employees that will be diverted to television sales activities. Evaluate the impact on total profitability of exiting the appliance sales market. How can overall profits be negatively impacted by abandoning an "unprofitable" product line?