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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: E(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.) 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 Total contribution margin at capacity Decision: iData Table odu Per Item Moderately Designer Priced Average sale price 195 $ 87 80 25 Average variable costs Average contribution margin 115 62 20 15 Average fixed costs (allocated) 95 $ 47 Average operating income 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 360 items in the store. If Preston Company emphasizes designer wear, it can These numbers are also the average monthly sales in units. only display 240 designer items. Print Done
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