Open with Google Docs "Amanda has been guided by its founders philosophy. offer the customer the best service, selection, quality and value." Amanda Philosophy Amanda Corporation is manufacturer of a high-end women's business apparel. It has three business divisions: clothing, shoes, and accessories. While Amanda was pleased with the company's progress, she was concerned by the growing number of customer complaints and the decreasing sales. Information for the just concluded calendar year follows. Clothing (RM) Shoes Accessories (RM) (RM) Sales (8,000 units) 850,000 320,000 150,000 Less: Variable Costs 510,000 270,000 82,500 Fixed Costs 290,000 70,000 42,000 Total Cost 800,000 340,000 124,500 Operating Income/(Loss) 50,000 (20,000) 25,500 Amanda's management is considering closing the shoe division because of the loss and expanding the space that is currently devoted to accessories sales. A salaried salesperson in the shoe division who earns RM45,000 will be terminated; however, all other departmental fixed costs will continue to be incurred. Amanda will spend RM16,000 on remodeling costs and anticipates that accessories sales will increase by RM70,000. This additional sales revenue is expected to generate a 35% contribution margin for the firm. Finally, because clothing customers often purchased shoes and feel strongly about "one-stop shopping," clothing sales are expected to fall by 15% if the shoe division is closed.