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Juda Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data:
Juda Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data: (Click the icon to view the data.) Prepare an analysis to show which product the company should emphasize. (Enter the units displayed per square foot and the contribution margin per square foot to two decimal places.) Product Designer Moderately Priced Data table Units displayed per square foot: Designer Per Item Moderately priced Moderately Designer Priced Contribution margin per unit Average sale price $ 205 $ 80 Contribution margin per square foot of display space 105 23 Average variable costs Capacity-Square feet of display space Average contribution margin 100 57 Total contribution margin at capacity 20 Average fixed costs (allocated) 10 Decision: 80 $ Average operating income 47 The Juda Company store in Grand Junction, Colorado, has 14,000 square feet of floor space. If Juda Company emphasizes moderately priced goods, it can display 980 items in the store. If Juda Company emphasizes designer wear, it can only display 420 designer items. These numbers are also the average monthly sales in units. Print Done
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