enback Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data: (Click the icon to view the data.) Prepare an analysis to show which product the company should emphasize. (Enter the units displayed per square foot Data table (...) Product W Per Item Designer Designer Moderately Priced 180 $ Units displayed per square foot: 65 Designer Moderately priced Contribution margin per unit Contribution margin per square foot of display space Capacity-Square feet of display space Total contribution margin at capacity Decision: Moderately Priced 85 $ Average sale price Average variable costs 115 Average contribution margin Average fixed costs (allocated) 20 95 $ 56 Average operating income The Stenback Company store in Grand Junction, Colorado, has 11,000 square feet of floor space. If Stenback Company emphasizes moderately priced goods, it can display 880 items in the store. If Stenback Company emphasizes designer wear, it can only display 220 designer items. These numbers are also the average monthly sales in units. 24 61 5
enback Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data: (Click the icon to view the data.) Prepare an analysis to show which product the company should emphasize. (Enter the units displayed per square foot Data table (...) Product W Per Item Designer Designer Moderately Priced 180 $ Units displayed per square foot: 65 Designer Moderately priced Contribution margin per unit Contribution margin per square foot of display space Capacity-Square feet of display space Total contribution margin at capacity Decision: Moderately Priced 85 $ Average sale price Average variable costs 115 Average contribution margin Average fixed costs (allocated) 20 95 $ 56 Average operating income The Stenback Company store in Grand Junction, Colorado, has 11,000 square feet of floor space. If Stenback Company emphasizes moderately priced goods, it can display 880 items in the store. If Stenback Company emphasizes designer wear, it can only display 220 designer items. These numbers are also the average monthly sales in units. 24 61 5
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 18E
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