Comment on the new policy from your point of view

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Reference no: EM131051948

You are the manager of the Paint Department. You receive the income from the Senior Manager with the following memo to the three department managers attached.

Income Statement Sharp Hardware Store For the year ended 30 June 2015

 

Hardware

Plumbing

Paint

Total

 

$

$

$

$

Sales

858,000

462,000

227,500

1,547,500

Lest cost of goods sold

399,250

215,750

68,250

683,250

Gross Profit

458,750

246,250

159,250

864,250

Less Expenses





Salaries-Manager

30,000

30,000

30,000

30,000

Salaries-other

225,000

120,000

140,000

485,000

Office expenses

33,267

17,913

8,820

60,000

Telephone

15,219

8,195

4,036

27,450

Supplies

55,000

39,600

15,400

110,000

Rent

40,000

20,000

20,000

80,000

 

398,486

235,708

218,256

852,450

Net Profit(Loss)

60,264

10,542

(59,006)

11,800

Performance this year is disappointing, particularly the Paint department which has recorded a loss of nearly $60 000. As a result, to improve performance in the future, a new system is going to be implemented. A bonus of $5 000 will be paid to one department manager at the end of next year on the basis of which department records the highest profit. 

Comment on the new policy from your point of view

Reference no: EM131051948

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