Unfocused Books is the discount retail bookshop which has three departments: fiction, non-fiction and children's books. Sales and cost of the sales for each department are shown below. Additionally, each department has its own fixed costs for the staffing and takes a one-third share of rental and management costs for Bookshop as an overall.
|
|
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
|
|
Total
|
87,500 profit
|
$5,000 profit
|
-$11,250 profit
|
What is profitability of the Unfocused Books' three departments and what suggestions would you make to owners?
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