Klintan sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data:

The Klintan store in Grand Junction, Colorado, has 9,000 square feet of floor space. If Klintan emphasizes moderately priced goods, it can display 630 items in the store. If Klintan emphasizes designer wear, it can only display 270 designer items. These numbers are also the average monthly sales in units.
Requirement
1. Prepare an analysis to show which product the company shouldemphasize.

Transcribed Image Text:

Per Item Moderately Designer Priced 210 | $ Average sale price 81 Average variable expenses Average contribution margin 90 26 %2$ 120 $ 55 Average fixed expenses (allocated) 15 Average operating income 105 $ 50