Arrow is a chain of used car dealers with showrooms in Lincoln, Derby and Sheffield and a separate Head Office. The management accountant is reviewing the profitability of each showroom. The rent and staff costs incurred by each showroom can be saved in the event of closure. Marketing costs are allocated to each showroom, but would not be saved, if any shop were to close. Head office cost is charged at a rate of 7% of sales. The data regarding costs and sales revenues for each showroom are presented below. a）What is the contribution margin for each showroom, as ordered in the table above? 1. 134 18 -62 2. 229 107 34 3. 250 135 46 4. 179 40 -44 b）What type of costs are the marketing costs？ 1. Non relevant 2. Relevant 3. Opportunity 4. Sunk c) What type of costs is the rent of showroom? 1. Non relevant 2. Relevant 3. Committed 4. Sunk
Arrow is a chain of used car dealers with showrooms in Lincoln, Derby and Sheffield and a separate Head Office. The
The data regarding costs and sales revenues for each showroom are presented below.
a）What is the contribution margin for each showroom, as ordered in the table above?
1. 134 18 -62
2. 229 107 34
3. 250 135 46
4. 179 40 -44
b）What type of costs are the marketing costs？
1. Non relevant
2. Relevant
3. Opportunity
4. Sunk
c) What type of costs is the rent of showroom?
1. Non relevant
2. Relevant
3. Committed
4. Sunk
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