ACCT

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 f x

A B C D E F

1 Budgeted Performance Report

All Stores For The Year Ending December 31, 20X5

2

3 Sales:

4 Printers $4,500,000

5 Cartridges 4,500,000

6 Total sales $9,000,000

7

8 Less variable expenses:

9 Printers $4,000,000

1 0 Cartridges 1,500,000

1 1 Total variable expenses $5,500,000

1 2

1 3 Contribution margin $3,500,000

1 4 Traceable fixed costs 1,550,000

1 5 Location margin $1,950,000

1 6 Common fixed costs 1,400,000

1 7 Stores margin $ 550,000

1 8

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 fol- lowing page, why is management upset?

Evaluating performance reports B-22.03