The average Costco warehouse in the United States generates an average of ($127,000,000) of net sales. When

Question:

The average Costco warehouse in the United States generates an average of \($127,000,000\) of net sales. When opening a new warehouse, Costco managers will measure the warehouse's success by how quickly its sales exceed the breakeven point. Assume that Costco's selling, general, and administrative (SG&A) expenses are fixed costs and that merchandise costs are the only variable costs. Use this information for fiscal year 2006 to calculate a breakeven point per ware- house. Round dollar amounts to the nearest thousand dollars.

1. Calculate the average number of warehouses open during 2006 by adding the beginning- and end-of-year amounts and dividing by 2.

2. Calculate SG&A expenses per warehouse.

3. Calculate the contribution margin rate.

4. Use this information to calculate breakeven sales dollars for 2006.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting Advanced

ISBN: 9780538447553

9th Edition

Authors: Claudia Bienias Gilbertson

Question Posted: