Question
Preston Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data:
Preston 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.) Units displayed per square foot Designer Moderately priced Contribution margin per unit Contribution margin per square foot of display space Capacity-Square feet of display space Total contribution margin at capacity Decision: Product Designer Moderately Priced iData Table -X Per Item Designer Moderately Priced Average sale price 220 $ 79 85 21 Average variable costs Average contribution margin 135 58 25 10 Average fixed costs (allocated) Average operating income $ 110 S 48 Enter any number in the edit fields and then continue to the next question. The Preston Company store in Grand Junction, Colorado, has 12,000 square feet of floor space. If Preston Company emphasizes moderately priced goods, it can display 720 items in the store. If Preston Company emphasizes designer wear, it can only display 480 designer items. These numbers are also the average monthly sales in units
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