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PERFORMANCE REPORT FOR PROFIT CENTERS Watson Clothiers, a retailer specializing in men's and ladies' career clothing, has stores in two Ohio cities: Cincinnati and Columbus. These stores are evaluated as profit centers. Sales and direct costs for the stores in the current year were as follows: Net sales Cost of goods sold Sales salaries Property taxes, utilities, and depreciation Miscellaneous operating expenses Cincinnati $220,000 80,000 32,000 16,000 1,000 Columbus $380,000 152,000 45,000 19,000 2,000 The following indirect costs were incurred by service departments at Watson Clothiers during in the current year: General Administration Personnel and Payroll Advertising $83,000 49,000 67,000 Store managers can control the services used from the Personnel and Payroll and the Advertising departments based on hiring and marketing decisions. They cannot control services provided by General Administration. Use of service department resources in the current year was as follows: Personnel and Payroll Advertising Percent used by Cincinnati 40% 25% Percent used by Columbus 60% 75% Required: Prepare divisional income statements for Watson Clothiers, showing each store's income from operations. In accordance with responsibility accounting, include only controllable revenues and controllable expenses

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