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Paisley Purse sells designer and everyday priced handbags. Top management is deciding which product line to emphasize. Company accountants have provided the following data:
Paisley Purse sells designer and everyday priced handbags. Top management is deciding which product line to emphasize. Company accountants have provided the following data:
tableAverage Sales Price,tableDesigner Per Everyday PerItem Item$$Average Variable Costs,,Average Contribution Margin,,Average Fixed Costs allocatedAverage Operating Income,$
margin to the nearest cent
Start by calculating the contribution margin per square foot for the Designer handbags.
Designer
Amount
Contribution margin per item
Items per square foot of display space
Total contribution margin per square foot of display space
Calculate the contribution margin per square foot for the Everyday handbags.
Everyday
Amount
Contribution margin per item
Items per square foot of display space
Total contribution margin per square foot of display space
Based on the analysis, which handbag should Paisley emphasize?
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