Question
These 3 questions: 4. If down increases by a certain percentage, will the selling price of a down-filled jacket need to change by that same
These 3 questions:
4. If down increases by a certain percentage, will the selling price of a down-filled jacket need to change by that same percentage to maintain the same profit margin? Explain. 5. Assume that a Land?s End down jacket selling for $100 uses 12 ounces of down. Further assume that Lands? End has $250,000 of fixed costs related to the down jacket line and its other variable manufacturing costs total $60 per jacket. As stated in the story, the cost per pound of down was $13 and $23 in October 2010 and October 2012, respectively. Calculate the breakeven number of jackets both in (a) October 2010; and (b) October 2012. Do these breakeven numbers agree with your answers to the prior questions? 6. Assume now the same set of facts as in Question 5 but that Lands? End raises the selling price of each jacket by $10 in October 2013. Does the contribution margin percentage remain the same?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started