lcon Stationers, Inc. is currently open from 8am to 8pm six days per week. The s

Question

lcon Stationers, Inc. is currently open from 8am to 8pm six days per week. The store is a BGSU retail merchandiser that sells cards, supplies, mmagazines, and a few books. The following is the most recent sminual Income Statesent received froen the company's external accountant Sales Cost of sales Gross margin (ie. Gross Profit) S302.200 47% ? $464,900 % 162.700/33 ») -os S, G & A (ie. Operating) expenses: Salaries Rent s $97,000 60,000 13,500 10,000 1,200 Insurance ," 100% 4000 184.500 Profit As an experiment, Frieda, the owner, kepk the store open for only eight hours on a recent Sunday. Resulting sales wero $840 and parl-time employment payroll costs were $135. Per the above incomme stateancut, and afier performing a few calculations and creating some percentages, she came up with about $391 as the estimated daily cost of operations without Sunday hours. She then concluded that about $910 in salcs revenac would be nccessary to justify opening on Sundays. Reguired: 1. Document the calculations Frieda made to determine her figures of $591 and $910 (He sure to document your work so others ean understand your analysis) surn 591) Frieda Soand 8591 daily oferalin by ta her tals/ days of ofera, ino 312.ge315 out of t 05 per ko the vear and divded 319,500 by 312.1-33, 5ges 1.275 for 1,50- 312. 7,520 Por 2. As you address Freda's analysis above, list at least one question you have for her. In essence, what else would you have wanted to know before making a recommendation? 3. Based upon the facts peesented, should Frieda open on Sandays? Why or Why pot? Take a position and explain. You may include both numerical andior non-numerical commentary If you choose to use the reverse to document yoar calcslations, so indicate.

Explanation / Answer

for explanation of her calculation:

when she opens for only week days then here days is 313 and hours 12 so daily operating expenses is 184500/313*12= 589 approx

for finding sales revneue :

Cost of sales is 162700*100/464900= 35% on sales so here to justify sales revenue on sunday we claculate Cost of sales when sale revenue is 910 then cost of sales 910*35/100=318 approx

so operating expenses is 910-318 = 591 which is estimated as per above.

2. if sales revneue is 840 , cost of sales is 840*35/100 = 294 and employmetn payout is 135 then income is 411 per day and 51.37 per hour which is less than week days per hour so she should not open on sunday.

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