Answered step by step
Verified Expert Solution
Question
1 Approved Answer
What if Style Inc. instead decided to increase the selling price of the product line with the lowest total contribution margin? a. Assuming total revenue
What if Style Inc. instead decided to increase the selling price of the product line with the lowest total contribution margin?
a. Assuming total revenue (and the revenue sales mix) is unaffected by the price increase, what price would they have to charge in order to meet the target contribution margin of $25,000?
b. Do you think this price is feasible? Why/why not?
Fixed costs $78/sqft in rental expense for a 400 sqft storage
Revenue = 600k
Dress shirt product lines | ||||
Classic | Premium | Executive | ||
Retail SP | $ 75.00 | $ 95.00 | $ 125.00 | |
% of Total Sales | 5% | 15% | 15% | |
Tailoring Costs | $ 7.50 | $ 9.25 | $ 10.75 | |
Shipping Costs | $ 48.50 | $ 58.75 | $ 69.25 | |
Suit product lines | ||||
Coat | Classic | Premium | Executive | |
Retail SP | $ 395.00 | $ 475.00 | $ 625.00 | $ 850.00 |
% of Total Sales | 10% | 15% | 15% | 25% |
Tailoring Costs | $ 28.35 | $ 25.50 | $ 29.00 | $ 33.10 |
Shipping Costs | $ 181.75 | $ 163.50 | $ 186.00 | $ 211.90 |
Step by Step Solution
★★★★★
3.52 Rating (155 Votes )
There are 3 Steps involved in it
Step: 1
If Style Inc decided to increase the selling price of the product line with the lowest total contrib...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started