Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gwazda Men's Clothings revenues and cost data for 2020 are as follows: Revenues 500000 Cost of Goods sold 225000 Gross Margin 275000 Operating Costs Salaries

Gwazda Men's Clothings revenues and cost data for 2020 are as follows:

Revenues 500000

Cost of Goods sold 225000

Gross Margin 275000

Operating Costs

Salaries Fixed 190000

sales commissions(9%of sales) 45000

depreciation 12000

store rent (4500permonth) 54000

othe operating costs 35000 336000

operating income(loss) (61000)

Mr. Gwazda, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes 20000 variable costs, which vary with sales volume and 15000 fixed costs.

A) compute the contribution margin of gwazda mens clothing. Determine the formula to caluclate the contribution margin then enter the amounts in the formula to compute the contribution margin

B)compute the contribution margin percentage. determine the formula to calculate the contribution margin percentage, then enter the amounts in the formula to compute the contribution margin percentage

C) Mr. Gwazda estimates that he can increase units sold, and increase revenues by 15% by incurring additional advertising costs of $8000. Calculate the impact of the additional advertising costs on operating income. determine the formula to solve for the amount then complete the formula.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Energy Management Audit And Conservation

Authors: U. P. Kumar Chaturvedula

1st Edition

6202015985, 978-6202015981

More Books

Students also viewed these Accounting questions

Question

Data Warehousing and Multi - Dimensional Data Modeling

Answered: 1 week ago

Question

What were your most important educational experiences?

Answered: 1 week ago

Question

Which personal relationships influenced you the most?

Answered: 1 week ago