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1. Prepare an analysis to show which product to drop. 2. What other considerations might affect your decision in number 1?

1. Prepare an analysis to show which product to drop. 2. What other considerations might affect your decision in number 1?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Average selling price Average variable expenses Average contribution margin Average contribution- margin percentage $240 120 $120 50% Priced $150 85 $65 43% 8 percentage The store has 8,000 square feet of floor space. If moderately priced goods are sold exclusively, 400 items can be displayed. If designer goods are sold exclusively, only 300 items can be displayed. Moreover, the rate of sale (turnover) of the designer items will be two-thirds the rate of moderately priced goods. 1. Prepare an analysis to show which product to drop. 2. What other considerations might affect your decision in number 1?
Transcribed Image Text:Average selling price Average variable expenses Average contribution margin Average contribution- margin percentage $240 120 $120 50% Priced $150 85 $65 43% 8 percentage The store has 8,000 square feet of floor space. If moderately priced goods are sold exclusively, 400 items can be displayed. If designer goods are sold exclusively, only 300 items can be displayed. Moreover, the rate of sale (turnover) of the designer items will be two-thirds the rate of moderately priced goods. 1. Prepare an analysis to show which product to drop. 2. What other considerations might affect your decision in number 1?
6-51 Choice of Products Gulf Coast Fashions sells both designer and moderately priced women's wear in Tampa. Profits have been volatile. Top management is trying to decide which product line to drop. Accountants have reported the following data: Average selling price Per Item Designer Moderate Priced $240 $150
Transcribed Image Text:6-51 Choice of Products Gulf Coast Fashions sells both designer and moderately priced women's wear in Tampa. Profits have been volatile. Top management is trying to decide which product line to drop. Accountants have reported the following data: Average selling price Per Item Designer Moderate Priced $240 $150
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