Regal Flair Enterprise has two product lines: jewelry and women\'sapparel. cost

Question

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 incomestatement for the current month. report the responsibility marginfor each product line and income from operations for the company asa whole. also include columns showing all dollar amounts aspercentages of sales.

(B) assume that a marketing survey shows that a $75,000 monthlyadvertising campaingn focused on eihther product line shouldincrease that product line's monthly sales by approdximately$150,000. do nyou recommend this additional advertising for eitheror both product lines? show computations to support ourconclusions.

(C) management is considering expanding one of the company's twoproduct lines. an investment of given dollar amount is expecte3d toincrease the sales of the expanded product line by $300,000. it isalso expected to increase the traceable fixed cost of the expandedproduct line by 75 percent. based on this information,m whichproduct line do you recommend expanding? explain the basis for yourconclusion.

Explanation / Answer

x.Xgn="left">(A) prepare regal flair enterprises's responsibility income statement for the current month. report the

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