Ask Question, Ask an Expert


Ask Basic Finance Expert

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.

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? describe the basis for your conclusion


Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M926039

Have any Question? 

Related Questions in Basic Finance

Suppose that you are a wheat farmer answer the following

Suppose that you are a wheat farmer. Answer the following questions. a. It is September, and you intend to have 50,000 bushels of wheat harvested and ready to sell in November. The current spot market price of wheat is $ ...

Question 1 when viewing the terms special returns or

Question 1. When viewing the terms "special returns" or "abnormal returns," we know this can refer to _____. the Efficient Market Hypothesis gains in excess of the market risk-adjusted average convertibles and warrants, ...

A company begins a review of ordering policies for its

A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUs. Following are the characteristics of one item. Annual Demand (D) = 64 units/week (Ass ...

Mike riskless is considering two projects he has estimated

Mike Riskless is considering two projects. He has estimated the IRR for each under three possible scenarios and assigned probabilities of occurrence to each scenario. State of Economy Probability Estimated BTIRR Investme ...

An investor estimates that next years sales for gyna inc

An investor estimates that next year's sales for Gyna Inc should amount to about 56 USD million. The company has 3.7 million shares outstanding, generates a net profit margin of about 8% , and has a payout ratio of 45%.a ...

An article in the wall street journal noted that of the

An article in the Wall Street Journal noted that of the thousands of mutual funds investing in stocks or stocks and bonds, only 31 had managed to earn a higher rate of return than the S&P 500 in every year from 1999 thro ...

1 define reaction time task completion time and

1. Define reaction time, task completion time, and interbehavior latency. 2. Give three examples (other than those in the chapter) of measures of duration. 3. What is interrater reliability, and what are some ways in whi ...

Go to the cbot web site httpwwwcbotcom and determine the

Go to the CBOT Web site (, and determine the contract specifications for Dow Jones Industrial Average futures. Determine the current futures price for the next available contract month. What would you ...

1 why is book value often meaningless what improvements to

1. Why is book value often meaningless? What improvements to financial statements would make it more meaningful? 2. Why should an investor read the note concerning stock options? How might stock options affect profitabil ...

1 what is the equation of exchange is the equation of

1. What is the equation of exchange? Is the equation of exchange a theory? Briefly explain. 2. What is the quantity theory of money? What does the quantity theory indicate is the cause of inflation? 3. What is purchasing ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen