Della Brown is the manager of one of the stores in the nationwide EatRite supermarket chain. Della's store has three departments; she evaluates the managers of each of those three departments using a Department Margin number. The following information has been gathered about the performance of Della's store in the most recent month.
Contribution-
Operating Departments Revenue Margin Ratio
Groceries $600,000 20%
Fresh produce 200,000 40%
Dry goods 500,000 35%
Fixed costs controllable by:
Manager of grocery department $50,000
Manager of fresh produce department 70,000
Manager of dry goods department 80,000
Store manager 100,000
Corporate headquarters 130,000
Total $430,000
Compute the STORE MARGIN number that can be used to appropriately measure the performance of Della Brown, the store manager, who is evaluated as a manager of a profit center. Remember that Della is the manager of the entire store meaning that she has responsibility for the store itself and for each of the departments in the store.
$175,000
$200,000
$375,000
$100,000
$75,000