Case Assignment 4 Principles of Accounting

Case Assignment 4 Principles of Accounting - TUI UNIVERSITY...

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TUI UNIVERSITY Dean J. Keveles Module 4 Case Assignment ACC403 Principles of Accounting Dr. Eugene J. Nesbitt June 4, 2011
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towels. Millenium sells the towels to three types of stores: department stores, mid-sized specialty stores and small gift shops. The company is doing well and the CEO wants to expand the business. The contribution margin ratio is the highest for the small gift shops, so the CEO feels that those are the type of retail outlets to pursue. Below find Millenium's income statement for last year. Millenium Linen Company For the year ended 12-31-XX Sales $500,000 Variable Production Costs 150,000 Contribution Margin $350,000 Fixed Costs: Production Overhead $120,000 180,000 300,000 Net Operating Income $50,000 Customer support & distribution costs are pretty high at Millenium. The total amount was $180,000 last year. The marketing manager has recently been to a seminar and learned about applying ABC to analyze customer and distribution costs. He suggests that the company analyze overhead costs associated with supporting different types of customers before proceeding with an expansion. The marketing manager knows that the small shops require a lot of attention and is somewhat dubious about the CEO's proposed strategy. The CEO accepts the suggestion and you are brought in as a consultant to prepare the analysis. The table below provides some information that may be pertinent for the analysis. Description
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This note was uploaded on 10/10/2011 for the course FINANCE ACC403 taught by Professor Dr.eugenej.nesbitt during the Winter '11 term at Trident Technical College.

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Case Assignment 4 Principles of Accounting - TUI UNIVERSITY...

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