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Katherines of Oregon is a used book and cd shop (owned by two women named Catherine, a Miss Paar particular order) overlooking the water near
Katherines of Oregon is a used book and cd shop (owned by two women named Catherine, a Miss Paar particular order) overlooking the water near Newport bay. The owner of and a Miss Howard, in no Anna's Bowling, two doors down (a Miss Anna Cleves), is interested in making and, in an attempt to make an estimate of the store's overall profitability, has compiled the following an offer to buy the shop, information as to expenses for both departments separately (book sales and cd sales). First of all, books are bought for an average of $ 5.20, and cds are bought for about $ 7.90. A normal years total sales (in units) is about 150,000 books and about 75,000 cds. The following cost totals relate to the whole store, and the approximate percentages of each cost type that are related to each department (and for the store generally) are: Totals Books % CDs % General Store % Costs $35,000 Advertising 35% 60% 5% $15,000 Promotions 25% 75% $ 45,000 Buying Staff 55% 45% $12,000 Maintenance 20 % 50 % 30% Based on this information, what is the total indirect cost to be allocated to the book and the cd departments? Using average per unit costs, what would be the total indirect and direct cost of one book and one cd? If the manager, Jane Seymour, wants to sell cds (on average) for a $5 per unit profit markup (considering both the direct and indirect costs), what should she charge
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