Question
Dress shirt product lines Classic Premium Executive Retail SP $ 75.00 $ 95.00 $ 125.00 % of Total Sales 14% 7% 14% Tailoring Costs $
| Dress shirt product lines | |||||
| Classic | Premium | Executive | |||
| Retail SP | $ 75.00 | $ 95.00 | $ 125.00 | ||
| % of Total Sales | 14% | 7% | 14% | ||
| Tailoring Costs | $ 12.00 | $ 16.00 | $ 18.00 | ||
| Shipping Costs | $ 35.00 | $ 40.00 | $ 45.00 | ||
| Suit product lines | |||||
| Coat | Classic | Premium | Executive | ||
| Retail SP | $ 395.00 | $ 475.00 | $ 625.00 | $ 850.00 | |
| % of Total Sales | 20% | 12% | 13% | 20% | |
| Tailoring Costs | $ 55.00 | $ 115.00 | $ 125.00 | $ 135.00 | |
| Shipping Costs | $ 200.00 | $ 210.00 | $ 215.00 | $ 220.00 | |
Fixed costs $78/sqft in rental expense for a 400 sqft storage
Revenue = 600k
What if Style Inc. instead decided to increase the selling price of the product line with the lowest total contribution margin? a. Assuming total revenue (and the revenue sales mix) is unaffected by the price increase, what price would they have to charge in order to meet the target contribution margin of $25,000? b. Do you think this price is feasible? Why/why not?
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Connect For Financial Accounting Fundamentals
Authors: Author
8th Edition
126411169X, 9781264111695
