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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.) Data Table X Product Designer Moderately Priced 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 Per Item Moderately Designer Priced S 180 $ 84 95 20 X Average sale price Average variable costs Average contribution margin Average fixed costs (allocated) Average operating income 85 64 20 Total contribution margin at capacity 10 $ 65 $ 54 The Preston Company store in Grand Junction, Colorado, has 6,000 square feet of floor space. If Preston Company emphasizes moderately priced goods, it can display 480 items in the store. If Preston Company emphasizes designer wear, it can only display 120 designer items. These numbers are also the average monthly sales in units. Enter any number in the edit fields and then click Check Answer. ? Print Done 1 part Cleal Answer remaining
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