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Category > Accounting Posted 23 Apr 2017 My Price 8.00

Assume that Dallas’ sales by major market are as follows

Refer to the data in Exercise 6–14. Assume that Dallas’ sales by major market are as follows

 

Sales . . . . . . . . . . . . . . . . . .  .

$600,000

 

100%

$400,000

 

100%

$200,000

 

100%

Variable expenses  . . . . . . . . .

360,000

 

60

260,000

 

65

100,000

 

50

Contribution margin  . . . . . . . .

240,000

 

40

140,000

 

35

100,000

 

50

Traceable fixed expenses . . . .

72,000

 

12

20,000

 

5

52,000

 

26

Market segment margin . . . . .

168,000

 

28

$120,000

 

30%

$  48,000

 

24%

Common fixed expenses

not traceable to markets . . .

 

18,000

 

 

3

 

 

 

 

 

 

Office segment margin . . . . . .

$150,000

 

25%

 

 

 

 

 

 

 

The company would like to initiate an intensive advertising campaign in one of the two markets during the next month. The campaign would cost $8,000. Marketing studies indicate that such a campaign would increase sales in the construction market by $70,000 or increase sales in the land- scaping market by $60,000.

Required:

1.       In which of the markets would you recommend that the company focus its advertising cam- paign? Show computations to support your answer.

2.       In Exercise 6–14, Dallas shows $90,000 in traceable fixed expenses. What happened to the

$90,000 in this exercise?

 

 

 
 
 

Answers

Alpha Geek
(8)
Status NEW Posted 23 Apr 2017 10:04 AM My Price 8.00

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file 1492941977-1364074_1_636283940150802260_1364074.xlsx preview (286 words )
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