Complete sets of dress handbag and accessory cape 70 Dress and accessory cape 6

# Complete sets of dress handbag and accessory cape 70

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Complete sets of dress, handbag and accessory cape 70% Dress and accessory cape 6 Dress and handbag 15 Dress only 9 Total 100% The material used in the dress cost \$20 a yard or \$80 for each dress. The cost of cutting the dress if the necessary cape and handbag are not manufactured is estimated at \$32 a dress, and the resulting remnants can be sold for \$8 per dress. If the accessory cape and handbag are manufactured, the cutting costs will be increased by \$14.40 per dress and there will be no salable remnants. The selling prices and the costs to complete the three items once they are cut are as follows: Unit Cost to Complete Selling Price Per Unit (excludes cost of material and cutting operation) Dress \$320.00 \$128.00 Accessory Cape \$44.00 \$31.20 Handbag \$15.20 \$10.40 Questions: 1. Calculate Golden Gate Fashions' incremental profit or loss from manufacturing the accessory capes and handbages in conjunction with the dresses. Revenues and Costs Under Two Alternatives Dress only Dress for set Cape Handbag a. Unit sale price \$320.00 \$320.00 \$44.00 \$15.20 b. Anticipated sales 1250 1500 1140 1275 (1250 x 120%) (1500 x 76%) (1500 x 85%) c. Revenue \$400,000.00 \$480,000.00 \$50,160.00 \$19,380.00 (a x b) d. Dress mateial \$100,000.00 \$120,000.00 0 0 (\$80 per dress) e. Cost to produce \$160,000.00 \$192,000.00 \$35,568.00 \$13,260.00 (\$128 x b) (\$128 x b) (\$31.20 x b) (\$10.40 x b) f. Cutting costs \$40,000.00 \$69,600.00 0 0 (\$32 x b) (46.40 x 1500) g. Remnant sale \$10,000.00 0 0 0 (\$8 x b) Net Profit \$110,000.00 \$98,400.00 \$14,592.00 \$6,120.00 If sales go according to the market research, the company can make an additional \$9,112 in net profit.

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• Spring '11
• JamesStephens
• Financial Accounting, Dress, Clothing terminology, Evening gown, cocktail dress