please assist me in detail' Averageselling priceAveragevariableexpensesAveragecontributionmarginAveragecontribution-marginpercentage$240120$12050%Priced$15085$6543%8percentageThe store has 8,000 square feet offloor space. If moderately pricedgoods are sold exclusively, 400items can be displayed. If designergoods are sold exclusively, only 300items can be displayed. Moreover,the rate of sale (turnover) of thedesigner items will be two-thirdsthe rate of moderately pricedgoods.1. Prepare an analysis to showwhich product to drop.2. What other considerationsmight affect your decision innumber 1? 6-51 Choice of ProductsGulf Coast Fashions sells bothdesigner and moderately pricedwomen's wear in Tampa. Profitshave been volatile. Topmanagement is trying to decidewhich product line to drop.Accountants have reported thefollowing data:Averageselling pricePer ItemDesigner ModeratePriced$240$150

High rate of sales is better. Higher contribution should also be emphasized.

Answered: 1. Prepare an analysis to show which…

1. Prepare an analysis to show which product to drop. 2. What other considerations might affect your decision in number 1?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 5CE: Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and...

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Computing breakeven sales and sales needed to earn a target profit; performing sensitivity analysis This problem continues the Piedmont Computer Company situation from Chapter 19. Piedmont Computer Company manufactures personal computers and tablets. Based on the latest information from the cost accountant, using the current sales mix, the weighted-average sales price per unit is $750 and the weighed-average variable cost per unit is $450. The company does not expect the sales mix to vary for the next year. Average fixed costs per month are $156,000. Requirements What is the number of units that must be sold each month to reach the breakeven point? If the company currently sells 945 units per month, what is the margin of safety in units and dollars? If Piedmont Computer Company desires to make a profit of $15,000 per month, how many units must be sold? Piedmont Computer Company thinks it can restructure some costs so that fixed costs will be reduced to $90,000 per month, but the…
Required information Problem 5-68 (Static) Cost Estimation: Simple and Multiple Regression Using a Spreadsheet (Appendix A) (LO 5-4, 5, 6, 9) [The following information applies to the questions displayed below.] Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. During a discussion, one of the managers suggests that number of employees might be better at explaining cost than store revenues. As a result of that suggestion, managers collected the following information from last year's operations (revenues and costs in thousands of dollars): Costs Employees 101$ 4,214 102 2,894 103 5, 181 104 3,998 105 3,676 106 107 108 109 110 2,959 111 4,179 112 113 Store 114 115 3, 319 5, 029 2,374 4, 688 3, 200 2,556 4, 655 2,986 39$ 29 47 38 33…
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Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and number of purchase orders. The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are: Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) What is the total fixed purchasing cost? Why doesnt it equal the fixed cost calculated in Requirement 1?
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4. Undertake a sensitivity analysis assessing the impact of operating leverage on net income based on the following two what-if scenarios for both the divisions. (Use appropriate formula and format the cells as 'currency'): a) Conservative scenario: What would be the projected net income (loss) if sales decrease by 40% in the fourth quarter? b) Optimistic scenario: What would be the projected net income (loss) if sales increase by 40% in the fourth quarter? 5. Assume that you are in the position of Cost Accountant in Fitness Fast Inc. Management seeks clarification from you on the notable differences in breakeven units between the two divisions, despite both divisions reporting identical total sales and net income for the period. Additionally, They are keen to understand the reasons behind the substantial disparities in the comparative data of the sensitivity analysis for the two divisions. Explain the reasons for such differences to management. (Write your answer in the Explanation…
Salespersons' Report and Analysis Pachec Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended June 30 are as follows: Variable Total Variable Cost Selling Salesperson Sales of Goods Sold Expenses Asarenka $437,500 $196,875 $83,125 Crowell 570,000 228,000 91,200 Dempster 141,750 675,000 310,500 MacLean 587,500 246,750 123,375 Ortiz 525,000 215,250 126,000 Sullivan 587,500 246,750 99,875 Williams 575,000 253,000 115,000 Required: 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. Round percents to the nearest whole number. Enter all amounts as positive numbers.
Salespersons' Report and Analysis Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows: Salesperson Total Sales Variable Cost of Goods Sold Variable Selling Expenses Case Dix Johnson LaFave Orcas Sussman Willbond Required: $363,000 453,000 524,000 592,000 542,000 592,000 366,000 $192,390 240,090 293,440 325,600 281,840 284,160 172,020 $50,820 72,480 99,560 88,800 75,880 112,480 58,560 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. Round percents to the nearest whole number. Enter all amounts as positive numbers.
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