Honacker Fashions sells both designer and moderately priced fashion accessories. Top management is deciding which product line to emphasize. Accountants have provided the following data:
__________________________________________________Per Item
_______________________________________________Designer Moderately Priced
Average sale price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $205 . . . . . . . . . . . . . .$83
Average variable expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .95 . . . . . . . . . . . . . . .28
Average fixed expenses (allocated) . . . . . . .. . . . . . . . . . . . . . . 20 . . . . . . . . . . . . . . 10
Average operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 90 . . . . . . . . . . . . . .$45
The Honacker store in Charleston, South Carolina, has 14,000 square feet of floor space. If Honacker emphasizes moderately priced goods, it can display 840 items in the store. If Honacker emphasizes designer wear, it can display only 560 designer items to create more of a boutique-like atmosphere. These numbers are also the average monthly sales in units. Prepare an analysis to show which product to emphasize.