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Solomon Boot Co. sells men's, women's, and children's boots. For each type of boot sold, it operates a separate department that has its own manager. The manager of the men's department has a sales staff of nine employees. the manager of the women's department has six employees, and the manager of the children's department has three employees. All departments are housed in a single store. In recent years, the children's department has operated at a net loss and is expected to continue to do so. Last year's income statements follow: Hart's Women's Children's Department Department: Department: Sales 3 T00,000 $ 500,000 $ 200,000 Cost: of goods sold {272,500} {132,000} (103,01'5} Gross margin 427,500 318,000 96,125 Department manager's salary (66,000} (55,000} (35,000} Sales emissions (120,200) (39,600) (34,900} Rent: on store lease (35,000} (35,000} (35,000} Store utilities (13,000} (13,000} (13,000} Net: incmne (loss) 5 133,300 $ 120,400 $ (26,??5} ' Required a. Calculate the contribution margin. Determine whether to eliminate the children's department. b-1. Calculate the net income for the company as a whole with the children's department. h-2. Conrm the conclusion you reached in Requirement 3 by preparing income statements for the company without the children's department. c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $46,000. Would this information affect the decision that you made in Requirement 3'? Complete thls question by entering your answers In the tabs below. Req uired a. Calculate the contribution margin. Determine whether to eliminate the children's department. b-t. Calculate the net income for the company as a whole with the children's department. b-2. Conrm the conclusion you reached in Requirement 3 by preparing income statements for the company without the children's department. c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wid er selection of adult boots would increase the store's net earnings by $46,000. Would this information affect the decision that you made in Requirement a? Complete thls question by enterlng your amen! In the tabs below. Required A Required Bl Required 32 Required I: Calculate the oontrlbutton margin. Determine whether to eliminate the children's department. (Negative amounts should be Indicated by a minus sign.) Contribution to prot (loss) Should the children's department be eliminated? Rent: on store lease (35,000} (35,000} (35,000} Store utilities [13.0001 [13.0001 113,000} Net income (loss) 5 138,300 $ 120.400 $ [26,??5} Required e. Calculate the contribution margin. Determine whether to eliminate the children's department b-1. Calculate the net income for the company as a whole with the children's department b-2. Conrm the conclusion you reached in Requirement 3 by preparing income statements for the company without the children's department. c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $46,000. Would this information affect the decision that you made in Requirement 3? Complete this question by entering your answers In the tabs below. ReqUiI-Ed Bl Calculate the net income for the company as a whole with the children's department. :| Required a. Calculate the contribution margin. Determine whether to eliminate the children's department. b-1. Calculate the net income for the company as a whole with the children's department. b-2. Confirm the conclusion you reached in Requirement a by preparing income statements for the company without the children's department. c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $46,000. Would this information affect the decision that you made in Requirement a? Complete this question by entering your answers in the tabs below. Required A Required B1 Required B2 Required C Confirm the conclusion you reached in Requirement a by preparing income statements for the company without the children's department. Men's Women's Company Department Department Total Sales Cost of goods sold Gross margin Department manager's salary Sales commissions Rent on store lease Store utilities Net income (loss)Required e. Calculate the contribution margin. Determine whether to eliminate the children's department h-1. Calculate the net income for the company as a whole with the children's department h-2. Conrm the conclusion you reached in Requirement 3 by preparing income statements for the company without the children's department. c. Eliminating the children's department would increase space available to display men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $46,000. Would this information affect the decision that you made in Requirement .3? Complete this question by entering your answers In the tabs below. Required A Required Bl Required 3.2 Required C Eliminating the children's department would Increase space available to displayI men's and women's boots. Suppose management estimates that a wider selection of adult boots would increase the store's net earnings by $46,000. Would this Information affect the decision that you made in Requirement a?
