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McKnight Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data:
McKnight 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 Moderately priced Contribution margin per unit Contribution margin per square foot of display space Per Item Moderately Designer Priced $ 210 $ 88 100 28 Capacity-Square feet of display space Average sale price Average variable costs Average contribution margin Average fixed costs (allocated) Average operating income Total contribution margin at capacity 60 110 15 5 $ 95 $ 55 The McKnight Company store in Grand Junction, Colorado, has 14,000 square feet of floor space. If McKnight Company emphasizes moderately priced goods, it can display 840 items in the store. If McKnight Company emphasizes designer wear, it can only display 560 designer items. These numbers are also the average monthly sales in units. Print Done
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