Preston Company sells both designer and moderately priced fashion accessories. Top management is deciding which...
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Preston Company sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data: (Click the icon to view the data.) Prepare an analysis to show which product the company should emphasize. (Enter the units displayed per square foot and the contribution margin per square foot to two decimal places.) Product Moderately Priced Designer Units displayed per square foot: Designer Moderately priced Contribution margin per unit Contribution margin per square foot of display space Capacity-Square feet of display space Total contribution margin at capacity Per Item Moderately Designer Priced Average sale price 195 $ 95 Average variable costs Average contribution margin 100 20 Average fixed costs (allocated) 80 $ Average operating income The Preston Company store in Grand Junction, Colorado, has 9,000 square feet of floor space. If Preston Company emphasizes moderately priced goods, it can display 630 items in the store. If Preston Company emphasizes designer wear, it can only display 270 designer items. These numbers are also the average monthly sales in units
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