Reference no: EM13495407
Boundaries, a chain of retail stores, sell books and music CDs. Condensed monthly income data are presented in the following table for November 20X6. (ignore income taxes)
Downtown store Mall store Total
Sales $240,000- $360,000- $600,000-
less: variable expenses $96,000= $252,000= $348,000=
Contribution margin $144,000- $108,000- $252,000-
less: fixed expenses $60,000= $120,000= $180,000=
Operating income $84,000 ($12,000) $72,000
Additional information:
Management estimates that closing the mall store would result in a 10% decrease in downtown store sales, while closing the downtown store would not affect mall store sales. one-fourth of each store's fixed expenses would continue through December 31, 20x7, if either store were closed.
Build a spreadsheet: Construct an excel spreadsheet to solve all of the preceding requirements. Show how the solution will change if the following information changes: the downtown store's sales amounted to $235,000, and its variable expenses were $90,000.
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