Create income statement for the current month

Reference no: EM1345022

Regal Flair Enterprises has 2 product lines: jewellery and women's apparel. Cost and revenue data for each product line for the current month are as follows:
Product lines
Jewlery Apparel
Sales........................................................................ $800,000 $450,000
Variable costs as a % of sales 55% 28%
Fixed costs traceable to product line $200,000 $250,000
In addition to the costs shown above, the company incurs monthly fixed costs of $100,000 common to both product lines.

INSTRUCTIONS:
A-prepare Regal Flair Enterprises responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole. Also include columns showing all dollar amounts as percentages of sales.

B-assumr that a marketing survey shows that $75,000 monthly advertising campaign focused on either product line should increase that product lines monthly advertising campaign focused on either product line should increase that product lines monthly sales by approx $150,000. Do you recommend this additional advertising for either or both product lines? Show computation to support your conclusions.

C-management is considering expanding one of the companys 2 product lines. An investment of a given dollar amount is expected to increase the sales of the expanded product line by $300,000. It is also expectd to increase the traceable fixed costs of the expanded product line by 75%. On the basis of this information which product line do you recommend expanding? Explain the basis for your conclusion

Reference no: EM1345022

Questions Cloud

Find the current yield and yeild to maturity : Charlotte's Clothing issued a 5% bond with a maturity date of fifteen years. 5-years have passed and the bond is selling for $690.

Determine the bonds current yield and yield to maturity : A bond with fifteen years until maturity has a semiannual interest rate of $40. If the bond sells for its par value, determine the bond's current yield and yield to maturity values?

Discuss the characteristics of resort business : The estimation of Kitty (Hawk Food), Inc., a restaurant food wholesaler in eastern Carolina. The company is experiencing difficulty paying trade debt & collecting trade receivables on time,

Creating form which analyzes poker hand entered by user : To observe behavior of Sub Procedures, draw a Form which analyzes a poker hand entered by user and displays the type of hand.

Create income statement for the current month : Regal Flair Enterprises has two product lines: jewellery & women's apparel. Cost & revenue data for every product line for current month are as follows;

Explain terrorist attacks foster instability and may affect : Explain terrorist attacks foster instability and may affect productivity over the short and long term.

Evaluate the required return for an asset : Evaluate the required return for an asset with a beta of .90 when the risk-free rate and market return are 6% and 10% respectively and fine the risk-free rate for a firm with a required return of 12% and a beta of 1.25

Explain sensitivity analysis : What role does this type of analysis play in your work environment or in your home environment and also explain sensitivity analysis.

How far does the bullet penetrate while stopping : the 25g bullet travelling at 350m/s strikes a block of wood. The block of wood exerts an average force of 50,000N opposing the motion of the bullet. How far does the bullet penetrate while stopping.

User Account

All Pages