Question

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Data Table - X Total 281,000 $ Sales revenue Variable expenses Fixed expenses Total expenses Operating income (loss) Men's 111,000 $ 62,000 39,000 101,000 10,000 $ Department Women's Accessories 66,000 $ 104,000 $ 32,000 80,000 33,000 29,000 65,000 109,000 1,000 $ (5,000) $ 174,000 101,000 275,000 6,000 $ Print Done

Answer 1

Knight Fashion Analysis of Replacing a Department with a Shoe Department Expected Increase in Revenues $ 86,000 Expected Increase in Expenses : Variable Expenses $ 53,000 Fixed Expenses $ 7,900 Increase in total expenses $ 60,900 Expected Increase (decrease) in Operating Income $ 25,100 $ Department Mens' Department Women's Department Accessories Dept. Contribution Margin $ 49,000 $ 34,000 $ 24,000 Knight Fashion should consider Replacing Accessories Deptarment with Shoe Department

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