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Rouse Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data:
Rouse Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data: 5 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 Data Table Designer Moderately Priced Per Item Moderately 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 Designer Priced Average sale price $ 200 $ 86 110 23 Average variable costs 90 63 Total contribution margin at capacity 15 5 Average contribution margin Average fixed costs (allocated) Average operating income Decision: $ 75 $ 58 The Rouse Company store in Grand Junction, Colorado, has 15,000 square feet of floor space. If Rouse Company emphasizes moderately priced goods, it can display 1,050 items in the store. If Rouse Company emphasizes designer wear, it can only display 450 designer items. These numbers are also the average monthly sales in units. Enter any number in the edit fields and then continue to the next question. Print Done
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