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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 s - X 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 Designer Product Moderately Priced X X Data table Average sale price Average variable costs Average contribution margin Average fixed costs (allocated) Average operating income $ $ Per Item Designer 210 $ 95 115 25 Moderately Priced 90 $ 87 22 65 15 50 The Preston Company store in Grand Junction, Colorado, has 9,000 square feet of floor space. If Preston Company emphasizes moderately priced goods, it can display 630 items in the store. If Preston Company emphasizes designer wear, it can only display 270 designer items These numbers are also the average monthly sales in units.
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