Business, 21.08.2019 02:10 mcmmonforte

Contribution margin, decision making. wharton men’s clothing’s revenuesand cost data for 2012 are as follows: revenues $500,000cost of goods sold 200,000gross margin = 300,000operating costs: salaries fixed $190,000sales commissions (11% of sales) 55,000depreciation of equipment and fixtures 14,000store rent ($5,000 per month) 60,000other operating costs 35,000 354,000operating income (loss) = $ (54,000)mr. wharton, the owner of the store, is unhappy with the operating results. an analysis of other operating costsreveals that it includes $25,000 variable costs, which vary with sales volume, and $10,000 fixed costs.1. compute the contribution margin of wharton men’s clothing.2. compute the contribution margin percentage.3. mr. wharton estimates that he can increase revenues by 25% by incurring additional advertising costs of$15,000. calculate the impact of the additional advertising costs on operating income.4. what other actions can mr. wharton take to improve operating income?

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Contribution margin, decision making. wharton men’s clothing’s revenuesand cost data for 2012 are as...

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