Reference no: EM131783320

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