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Root Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data:
Root 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 1 Designer Data table Moderately Priced Units displayed per square foot: Designer Moderately priced Per Item Moderately Designer Priced $ 185 $ 81 Contribution margin per unit Contribution margin per square foot of display space Average sale price 95 22 Capacity-Square feet of display space Average variable costs Average contribution margin 90 59 Total contribution margin at capacity 25 15 Average fixed costs (allocated) Decision $ 65 $ 44 Average operating income The Root Company store in Grand Junction, Colorado, has 14,000 square feet of floor space. If Root Company emphasizes moderately priced goods, it can display 1,120 items in the store. If Root Company emphasizes designer wear, it can only display 280 designer items. These numbers are also the average monthly sales in units. Print Done
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