Author Question: Discuss 4 types of expenses incurred in a fashion production other than the fashions themselves. ... (Read 52 times)

iveyjurea · **on:** Sep 11, 2018

Discuss 4 types of expenses incurred in a fashion production other than the fashions themselves.

What will be an ideal response?

Question 2

The lingerie department of store A produced 113,000 in gross sales, customer returns and allowances of 3,000, cost of goods sold was 52,000, and operating expenses were 51,070. Store B, also in the lingerie department, produced the following results within the same time frame. Net sales were 220,000, cost of goods sold was 100,000, and operating expenses were 110,000.

a. Comparing the two stores, which was more profitable in dollars? Store B
b. Which store was more efficient? Why? Store A, better expense management

hollysheppard095 · **Reply #1 on:** Sep 11, 2018

Answer to Question 1

Lighting and other enhancements, models, the venue itself, make-up and hair stylists, interior
designers, music, tents, etc.

Answer to Question 2

Store A
113,000 Gross sales
- 3,000 Customer returns and allowances
=110,000 Net sales 100.0
- 52,000 Cost of Goods sold 47.3
= 58,000 Gross margin 52.7
- 51,070 Operating expenses 46.4
= 6,930 Net profit 6.3
Store B
220,000 Net sales 100.0
- 100,000 Cost of goods sold 45.5
=120,000 Gross margin 54.5
-110,000 Operating expenses 50.5
= 10,000 Net Profit 4.5