mike (2) - Part I Opportunity cost of owing the business...

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Part I Opportunity cost of owing the business b-1 Independent Two year income 78000 Less: Permit cost 20000 Opportunity cost Net Income 58000 B-2 Dispatcher Salary 58000 Interest income for 2 year 15200 Less: Opportunity cost Net Income 73200 Part II A-1 Children department Sales $210,000 Cost of goods sold $104,375 Sales commission $35,400 Department manager salary $36,000 Contribution margin $34,225 Children department contribution towards company profit is $34,225 A-2 No the company should not eliminate the children department, as it has positive contribution margin and is contributing to the company profitability B-1 Men Women Child Total Sales $710,000 $490,000 $210,000 $1,410,000 Cost of goods sold $273,000 $182,400 $104,375 $559,775 Sales commission $121,200 $90,600 $35,400 $247,200 Department manager salary $67,000 $56,000 $36,000 $159,000 Contribution margin $248,800 $161,000 $34,225 $444,025 Rent on store $108,000 Store utilities $57,000 Net profit $279,025 B-2 Men Women Total
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This note was uploaded on 12/04/2011 for the course ECONOMICS 201 taught by Professor Rcollier during the Spring '10 term at Portland CC.

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