Bramble Design Inc., a high-fashion women's dress manufacturer, is planning to market a new cocktail dress for the coming season. Bramble Design supplies retailers in Toronto, Montreal, and the Atlantic provinces. Four metres of material are laid out for the dress pattern. After cutting, some material remains, which can be sold as remnants. The company could also use the leftover material to manufacture a matching cape and handbag. However, if it uses the leftover material for the cape and handbag, more care will be needed in the cutting, and the cutting costs will therefore increase. The company expects to sell 2,600 dresses if a matching cape and handbag are not available. Bramble Design's market research reveals, however, that dress sales would be 25% higher if a matching cape and handbag were available. The market research indicates that the cape and/or handbag could not be sold individually but only as accessories with the dress. The various combinations of dresses, capes, and handbags that retailers will sell are as follows: Complete sets of dress, cape, and handbag 70% Dress and cape 6% Dress and handbag Dress only Total 14% 10% 100% The material used in the dress costs $13.00 a metre, or $52.00 for each dress. The cost of cutting the dress if the cape and handbag are not manufactured is estimated at $22.00 a dress, and the resulting remnants can be sold for $5.00 for each dress cut out. If the cape and handbag are to be manufactured, the cutting costs will be increased by $10.00 per dress. There will be no saleable remnants if the capes and handbags are manufactured in the quantities estimated. The selling prices and the costs to complete the three items once they are cut are as follows: Selling Price per Unit Unit Cost to Complete Dress $204.00 Cape 30.00 Handbag 12.00 "Excludes cost of material and cutting. (a) Your answer is incorrect. $85.00 25.00 8.00 Calculate operating income if only the dress is cut and sold. Operating income Calculate operating income if the dress and accessories are produced and sold. (Round answer to 0 decimal places, eg. 125)
Bramble Design Inc., a high-fashion women's dress manufacturer, is planning to market a new cocktail dress for the coming season. Bramble Design supplies retailers in Toronto, Montreal, and the Atlantic provinces. Four metres of material are laid out for the dress pattern. After cutting, some material remains, which can be sold as remnants. The company could also use the leftover material to manufacture a matching cape and handbag. However, if it uses the leftover material for the cape and handbag, more care will be needed in the cutting, and the cutting costs will therefore increase. The company expects to sell 2,600 dresses if a matching cape and handbag are not available. Bramble Design's market research reveals, however, that dress sales would be 25% higher if a matching cape and handbag were available. The market research indicates that the cape and/or handbag could not be sold individually but only as accessories with the dress. The various combinations of dresses, capes, and handbags that retailers will sell are as follows: Complete sets of dress, cape, and handbag 70% Dress and cape 6% Dress and handbag Dress only Total 14% 10% 100% The material used in the dress costs $13.00 a metre, or $52.00 for each dress. The cost of cutting the dress if the cape and handbag are not manufactured is estimated at $22.00 a dress, and the resulting remnants can be sold for $5.00 for each dress cut out. If the cape and handbag are to be manufactured, the cutting costs will be increased by $10.00 per dress. There will be no saleable remnants if the capes and handbags are manufactured in the quantities estimated. The selling prices and the costs to complete the three items once they are cut are as follows: Selling Price per Unit Unit Cost to Complete Dress $204.00 Cape 30.00 Handbag 12.00 "Excludes cost of material and cutting. (a) Your answer is incorrect. $85.00 25.00 8.00 Calculate operating income if only the dress is cut and sold. Operating income Calculate operating income if the dress and accessories are produced and sold. (Round answer to 0 decimal places, eg. 125)
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Transcribed Image Text:Bramble Design Inc., a high-fashion women's dress manufacturer, is planning to market a new cocktail dress for the coming season.
Bramble Design supplies retailers in Toronto, Montreal, and the Atlantic provinces.
Four metres of material are laid out for the dress pattern. After cutting, some material remains, which can be sold as remnants. The
company could also use the leftover material to manufacture a matching cape and handbag. However, if it uses the leftover material
for the cape and handbag, more care will be needed in the cutting, and the cutting costs will therefore increase.
The company expects to sell 2,600 dresses if a matching cape and handbag are not available. Bramble Design's market research
reveals, however, that dress sales would be 25% higher if a matching cape and handbag were available. The market research indicates
that the cape and/or handbag could not be sold individually but only as accessories with the dress. The various combinations of
dresses, capes, and handbags that retailers will sell are as follows:
Complete sets of dress, cape, and handbag
70%
Dress and cape
6%
14%
Dress and handbag
Dress only
Total
10%
100%
The material used in the dress costs $13.00 a metre, or $52.00 for each dress. The cost of cutting the dress if the cape and handbag are
not manufactured is estimated at $22.00 a dress, and the resulting remnants can be sold for $5.00 for each dress cut out. If the cape
and handbag are to be manufactured, the cutting costs will be increased by $10.00 per dress. There will be no saleable remnants if the
capes and handbags are manufactured in the quantities estimated.
The selling prices and the costs to complete the three items once they are cut are as follows:
Selling Price per Unit
Unit Cost to Complete"
Dress
$204.00
$85.00
Cape
30.00
25.00
Handbag
12.00
8.00
*Excludes cost of material and cutting.
(a)
Your answer is incorrect
Calculate operating income if only the dress is cut and sold.
Operating income $
Calculate operating income if the dress and accessories are produced and sold. (Round answer to O decimal places, eg. 125.)
Operating income 6
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