G Safari .111 10:39 PM Done 5 of 6 sales mix Moore Company sells both designer a

Question

G Safari .111 10:39 PM Done 5 of 6 sales mix Moore Company sells both designer and moderatcly priced fashion accessonies s deciding which product inc to emphasine. Accountants have provided the following data DesignerPriced s 185 105 80 20 $ 87 Average sales price Average variable cost Average contribution margin Average fixed costs (allocated) Average operating income 65 10 The Moore Company store in Grand Junction, Colonads, has 14/0l soyare fet of floor space. If Moore Company emphasizes moderanely priced goods, it can display 840 items in the storc. If Moon Company cmphasioss designer weat, in can display only 560 designer items. These numbers are aho the averags mointhly sales in units Prepane an analysis to shw which product the company should emphasize

Explanation / Answer

Company should give more emphasis on moderately priced product

Explanation:

No. of unit sold for designer = 560

No. of units sold for moderately priced = 840

Statement showing profit earned from each product

moderately priced

Thus, the company should emphasis on moderately priced product as it will give more income by $12600

Designer

moderately priced

Sales 103600(560*185) 73080(840*87) Variable cost 58800(560*105) 18480(840*22) Contribution 44800 54600 Fixed cost 11200(560*20) 8400(840*10) Profit 33600 46200

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