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What is the profitability of unfocused books

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Reference no: EM131882451

Problem - Unfocused Books is a discount retail bookshop that has three departments: fiction, non-fiction and children's books. Sales and cost of sales for each department are shown below. In addition, each department has its own fixed costs for staffing and takes a one-third share of rental and management costs for the Bookshop as a whole.

 

Fiction

Non-Fiction

Children's

Sales

250,000

100,000

75,000

Cost of sales

45%

50%

55%

Departmental costs

50,000

35,000

35,000

Shared fixed costs

30,000

30,000

30,000

What is the profitability of Unfocused Books' three departments and what recommendations would you make to the owners?

Reference no: EM131882451

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