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5 star only!!!PART #3a

Review Decision Case 1 (Donna Tse) located on page 1127 in you textbook. Answer the case question in the Requirements section of the case. Your memo should be at least two paragraphs in length.

Case 1. Donna Tse has recently accepted the position of assistant manager at Cycle World, a bicycle store in St. Louis. She has just finished her accounting course. Cycle world’s manager and owner, Jeff Towry, asks Tse to prepare a budget income statement for 2011 based on the information he has collected. Tse’s budget follows:

Cycle World
Budgeted Income Statement
For the year Ending
July 31, 2011

Sales revenue

$244,000
Cost of goods sold

177,000
Operating expense:

Salary and commission expense
$46,000

Rent expense
8,000

Depreciation expense
2,000

Insurance expense
800

Misc. expense
12,000
68,800
Operating loss

(1,800)
Interest expense

(225)
Net loss

$ (2,025)
Requirement
Tse does not want to give Towry this budget without making constructive suggestions for steps Towry could take to improve expected performance. Write a memo to Towry outlining your suggestions.
PART #3b

At the end of each module, you will apply the module’s concepts by completing comprehensive assignments from the textbook.
Complete problems P21-20A (p. 1121), P21-21A (p. 1122), and P21-22A (p.1123) in your textbook.
Present your analysis of the assigned problems in Excel format. Enter non-numerical responses in the same worksheet using textboxes.

P21-20A: Doggy World operates a chain of pet stores in the midwest. The manager of each store reports to the regional manager, who, in turn, reports to the headquarters in Milwaukee, Wisconsin. The actual income statements for the Dayton store, the Ohio region (including the Dayton store), and the company as a whole (including the Ohio region) for July 2011 are as follows:

Doggy World
Income Statement
For the month Ended July 31, 2011

Dayton
Ohio
Companywide
revenue
$158,400
$1,760,000
$4,400,000
expenses

Regional manager/headquarters office
$ 0
$ 58,000
$ 122,000
Cost of materials
85,536
880,000
1,760,000
Salary expense
41,184
440,000
1,100,000
Depreciation expense
7,800
91,000
439,000
Utilities expense
4,000
46,600
264,000
Rent expenses
2,500
34,500
178,000
Total expenses
141,020
1,550,100
3,863,000
Operating income
$ 17,380
$209,900
$537,000

Doggy World
Income Statement
For the month Ended July 31, 2011

Dayton
Ohio
Companywide
revenue
$173,400
$1,883,000
$4,650,000
expenses

Regional manager/headquarters office
$ 0
$ 64,600
$ 124,000
Cost of materials
91,902
1,035,650
2,092,500
Salary expense
41,616
470,750
1,162,500
Depreciation expense
7,800
87,500
446,000
Utilities expense
4,900
54,600
274,000
Rent expenses
3,400
32,700
169,000
Total expenses
149,618
1,745,800
4,268,000
Operating income
$ 23,782
$137,200
$382,000

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