Prepare regal flair enterprisess responsibility income

Reference no: EM13481942

Regal Flair Enterprise has two product lines: jewelry and women'sapparel. cost and revenue data for each product line for thecurrent month are as follows:

sales.............................................$800,000(jewelry) $450,000(apparel)

variable costs as a percentage of sales..........55% 28%

fixed costs traceable to productlines..$200,000 $250,000

In addition to the costs shown above, the company incurs monthlyfixed costs of $100,000 common to both product lines.

Instructions:

(A) Prepare regal flair enterprises's 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) Assume that a marketing survey shows that a $75,000 monthly advertising campaingn focused on eihther product line should increase that product line's monthly sales by approximately $150,000. do nyou recommend this additional advertising for either or both product lines? show computations to support ourconclusions.

(C) Management is considering expanding one of the company's two product lines. an investment of given dollar amount is expected to increase the sales of the expanded product line by $300,000. it is also expected to increase the traceable fixed cost of the expandedproduct line by 75 percent. based on this information, which product line do you recommend expanding? Explain the basis for your conclusion.

Reference no: EM13481942

Questions Cloud

Calculate debt-equity ratio fixed assets to total assets : q no.1-nbspfrom the following you are required to comment a upon the long term as well as short term solvency of the

What is the actual wage rate per hour compute the labor : a popular product of loring glassworks is a hand-decorated vase. the companys standard cost system calls for .75 hours

Compute 2 breakeven point in units of product 2 even point : a company produces only one product. normal capacity is 0000 units per year and the unit sales price is rs.5 relevant

Barnett company uses the weighted-average method in : barnett company uses the weighted-average method in itsprocess costing system. the company adds materials t

Prepare regal flair enterprisess responsibility income : regal flair enterprise has two product lines jewelry and womensapparel. cost and revenue data for each product line for

Classify the following costs as either product : classify the following costs as either product inventoriable costs or period non inventoriable costs in a manufacturing

What type of company would use a process costing system : what type of company would use a process costing system? what about a job-order costing system? provide two examples

Prepare the production schedule in units for safen bright : safe n bright inc. produces outside doors for installation on homes. the following information was gathered to prepare

For each proposal compute the payback peroid return on : a firm is considering two alternative proposals for modernizingits production facilities. to provide a basis for

User Account

All Pages