Accounting Case Import Distributor

1255 WordsJun 3, 20116 Pages
Situation Import Distributors ,Inc ( IDI ) imported and distributed appliances to retail stores in the Rocky Mountain states. IDI has three board lines of merchandise: 1. Television Equipment 2. Audio Equipment 3. Kitchen Appliances Each line accounted for about one-third of total sales IDI sales revenue; In late 1993 : Company started to set up departmental income statements in obtain to see if each department is carrying its fair share of the load. In early April of 1994, the first departmental income statement were distributed to the management group. In the first quarter of 1994 television department had shown a gross margin that was much too small to cover the department’s operating expenses. As shown in following income…show more content…
After the system considered good and applied well, then the company can see the real performance of all departments. 9. If it is decided to closing down the Television Department, in my opinion, it would not affect the sales of other two departments. Currently, people has tendency to buy product based on the product quality, price and its value rather than brand loyalty for every electronic products. For example, HP is a good brand, I have used this brand as my printer since I was in high school. Do I automatically use HP’s notebook also? Nope, I prefer to use Dell’s notebook since it gives me more satisfactions. Please note that even though the sales of other two departments would not be affected, but it will adversely affect the other departments’ operation, for example they have to carry heavier cost of rent or the personnel staffs who will serve only for two

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