Lurvey Men's Clothing's revenues and cost data for 2017 are as follows: (Click the icon to...
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Lurvey Men's Clothing's revenues and cost data for 2017 are as follows: (Click the icon to view the data.) Mr. Lurvey, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $45,000 variable costs, which vary with sales volume, and $5,000 (fixed) costs. Read the requirements. Requirement 1. Compute the contribution margin of Lurvey Men's Clothing. Determine the formula to calculate the contribution margin, then enter the amounts in the formula to compute the contribution margin of Lurvey Men's Clothing. Contribution margin Requirement 2. Compute the contribution margin percentage. Determine the formula to calculate the contribution margin percentage, then enter the amounts in the formula to compute the contribution margin percentage. (Enter the result as a whole percentage, XX%.) = Contribution margin percentage T % Requirement 3. Mr. Lurvey estimates that he can increase units sold, and hence revenues by 25% by incurring additional advertising costs of $13,000. Calculate the impact of the additional advertising costs on operating income. Determine the formula to solve for the amount then complete the formula. = Change in operating income Requirement 4. What other actions can Mr. Lurvey take to improve operating income? To improve operating income, Mr. Lurvey must find ways to i Data Table Revenues Cost of goods sold (all variable costs) Gross margin Operating costs: Salaries fixed Sales commissions (13% of sales) Depreciation on equipment and fixtures Store rent ($3,000 per month) Other operating costs Operating income (loss) Print Done $ 180,000 65,000 17,000 36,000 50,000 $ - X - 500,000 200,000 300,000 348,000 $ (48,000) Lurvey Men's Clothing's revenues and cost data for 2017 are as follows: (Click the icon to view the data.) Mr. Lurvey, the owner of the store, is unhappy with the operating results. An analysis of other operating costs reveals that it includes $45,000 variable costs, which vary with sales volume, and $5,000 (fixed) costs. Read the requirements. Requirement 1. Compute the contribution margin of Lurvey Men's Clothing. Determine the formula to calculate the contribution margin, then enter the amounts in the formula to compute the contribution margin of Lurvey Men's Clothing. Contribution margin Requirement 2. Compute the contribution margin percentage. Determine the formula to calculate the contribution margin percentage, then enter the amounts in the formula to compute the contribution margin percentage. (Enter the result as a whole percentage, XX%.) = Contribution margin percentage T % Requirement 3. Mr. Lurvey estimates that he can increase units sold, and hence revenues by 25% by incurring additional advertising costs of $13,000. Calculate the impact of the additional advertising costs on operating income. Determine the formula to solve for the amount then complete the formula. = Change in operating income Requirement 4. What other actions can Mr. Lurvey take to improve operating income? To improve operating income, Mr. Lurvey must find ways to i Data Table Revenues Cost of goods sold (all variable costs) Gross margin Operating costs: Salaries fixed Sales commissions (13% of sales) Depreciation on equipment and fixtures Store rent ($3,000 per month) Other operating costs Operating income (loss) Print Done $ 180,000 65,000 17,000 36,000 50,000 $ - X - 500,000 200,000 300,000 348,000 $ (48,000)
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Cost Accounting A Managerial Emphasis
ISBN: 978-0132109178
14th Edition
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
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