Question
The boot department of the Great Western Outfitters store is preparing to set sales goals for the upcoming year. Sally Brown, the department manager, is
The boot department of the Great Western Outfitters store is preparing to set sales goals for the upcoming year. Sally Brown, the department manager, is trying to determine what brands of boots to retain as part of the sales inventory. In particular, she is wondering about the value of continuing to sell Durango Boots. Going through past records, she retrieves the following information about the sales of Durango boots and asks you to help her with some calculations:
Total Sales (1,000 pairs of boots)
$500,000
Variable Costs
$300,000
Fixed Costs
$150,000
Tax Rate
25%
Based on the above information:
oCompute the Contribution Margin (CM), unit CM, and CM ratio. IN order to earn full credit for your work, please remember to include detailed step by step calculations with your response.
CM = S VC = $500,000 300,000 = $200,000. I subtracted $500,000 from $300,000
Unit CM = p v = ($500,000 / 1,000) ($300,000 / 1,000) = ???
CM Ratio = CM / S = ???
I am trying to get help on this problem. I have never been good in math and I trying to understand this problem.
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