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Needed ASAP 14:6 Tipton One-Stop Decorating sells paint and paint supplies, carpet, and wallpaper at a single-store location in suburban Des Moines. Although the company
Needed ASAP 14:6
Tipton One-Stop Decorating sells paint and paint supplies, carpet, and wallpaper at a single-store location in suburban Des Moines. Although the company has been very profitable over the years, management has seen a significant decline in wallpaper sales and earnings. Much of this decline is attributable to the Internet and to companies that advertise deeply discounted prices in magazines and offer customers free shipping and toll-free telephone numbers. Recent figures follow. Tipton is studying whether to drop wallpaper because of the changing market and accompanying loss. If the line is dropped, the following changes are expected to occur: - The vacated space will be remodeled at a cost of $12,400 and will be devoted to an expanded line of high-end carpet. Sales of carpet are expected to increase by $120,000, and the line's overall contribution margin ratio will tise by five percentage points. - Iipton can cut wallpaper's fixed costs by 40 percent. Remaining fixed costs will continue to be incurred. - Customers who purchased wallpaper often bought paint and paint supplies. Sales of paint and paint supplies are expected to fall by 20 percent. - The firm will increase advertising expenditures by $25,000 to promote the expanded carpet line. Required: 1-0. Calculate the income or loss if Tipton closes its wallpaper operation. 1-b. Should Tipton close its wallpaper operation? 2. Assume that Tipton's walpaper inventory at the lime of the closure decision amounted to $23,700. How would you have treated this additional information in making the decision? 3. What advantages might Internet- and magazine-based firms have over Tipton that would allow these organizations to offer deeply discounted prices-prices far below what Tipton can offer? Customers who purchased wallpaper often bought paint and paint supplles. Sales of paint and paint supplles are expected to fall by 20 percent. - The firm wili increase advertising expenditures by $25,000 to promote the expanded carpet line. Required: 1-0. Calculate the income or loss if Tipton closes its wallpaper operation. 1-b. Should Tipton close its wallpaper operation? 2. Assume that Tipton's wallpaper inventory at the time of the closure decision amounted to $23,700. How would you have treated this additional information in making the decision? 3. What advantages might internet-and magazine-based firms have over Tipton that would allow these organizations to offer deeply discounted prices-prices far below what Tipton can offer? Complete this question by entering your answers in the tabs below. Calculate the income or loss if Tipton closes its wallpaper operation. - Customers who purchased wallpaper often bought paint and paint supplies. Sales of paint and paint supplles are expected to fall by 20 percent. - The firm will increase advertising expenditures by $25,000 to promote the expanded carpet line. Required: 1-0. Calculate the income or loss if Tipton closes its wallpaper operation. 1-b. Should Tipton close its wallpaper operation? 2. Assume that Tipton's wallpaper inventory at the time of the closure decision amounted to $23,700. How would you have treated this additional information in making the decision? 3. What advantages might Internet-and magazine-based firms have over Tipton that would allow these organizations to offer deeply discounted prices - prices far below what Tipton can offer? Complete this question by entering your answers in the tabs below. Should Tipton close its wallpaper operation? - Customers who purchased wallpaper often bought paint and paint supplles. Sales of paint and paint supplies are expected to fall by 20 percent. - The firm will increase advertising expenditures by $25,000 to promote the expanded carpet ilne. Required: 1-o. Calculate the income or loss if Tipton closes its wallpaper operation. 1-b. Should Tipton close its wallpaper operation? 2. Assume that Tipton's wallpaper inventory at the time of the closure decision amounted to $23,700. How would you have treated this additional information in making the decision? 3. What advantages might Internet-and magazine based firms have over Tipton that would allow these organizations to offer deephy discounted prices-prices far below what Tipton can offer? Complete this question by entering your answers in the tabs below. Assume that npton's wallpaper inventory at the time of the closure decision amounted to $23,700. How would you have treated this additional information in makino the dedsion? This cost is important. The revenue gonerated from the sabe of this inventory is relevant to the clasure decision The cost should be ignored. The inventory cost is sunk. Regatdless of whether the department is closed, Tiplon wil have a walpaper inventory of 523 , 700 Customers who purchased wallpaper often bought paint and paint supplies. Sales of paint and paint supplies are expected to fall by 20 percent: - The firm wili increase advertlising expenditures by $25,000 to promote the expanded carpet line. Required: 1-0. Calculate the income or loss if Tipton closes its wallpaper operation. 1-b. Should Tipton close its wallpaper operation? 2. Assume that Tipton's wallpaper inventory at the time of the closure decision amounted to $23,700. How would you have treated this additional information in making the decision? 3. What advantages might Internet-and magazine-based firms have over Tipton that would allow these organizations to offer deeply discounted prices-prices far below what Tipton can offer? Complete this question by entering your answers in the tabs below. What advantages might Internet-and magazine-based firms have over Tipton that would allow these organizations to offer deeply discounted prices-prices far below what Tipton can offer? (Select "Yes' if the statement is a benefit of allocating utility costs to the divisions, and "No" if it is not a benefit:) Step by Step Solution
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