Contribution Margin - Sales - Variable costs | |||
=Sales - cost of goods sold - department manager's salary - sales commission | |||
= | 44225 | ||
No, since positive contribution margin | |||
b-1 | |||
Net Income as a whole = 161300+94000-20775 = $234,525 | |||
b-2 | |||
Men | Women | Company | |
Sales | 700,000 | 500,000 | 1,200,000 |
COGS | -275,500 | -184,400 | -459,900 |
Gross Margin | 424,500 | 315,600 | 740,100 |
Salary | -72,000 | -61,000 | -133,000 |
Sales Commission | -126,200 | -95,600 | -221,800 |
Rent | -61,500 | -61,500 | -123,000 |
Utilities | -36,000 | -36,000 | -72,000 |
Net Income | 128,800 | 61,500 | 190,300 |
Since fixed costs of rent and utilities will not be reduced, they are allocated to remaining divisions | |||
Yes, better to discontinue as additional earnings are higher than contribution margin |
Western Boot Co. sells men's, women's, and children's boots. For each type of boot sold, it...
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