Mini-Case 14-4: "We're Moving on Up

question 143

Essay

Mini-Case 14-4: "We're Moving On Up"
Mike and Earl Moore, owners of College Men's Unlimited, have just signed a five-year lease in the new College Town Mall. The new mall is ideally located for their business-a short walk from campus and only two blocks from downtown. The far side of the mall is bounded by the most prestigious homes in the city. It will be opening in five weeks and Mike and Earl are lucky to have such a prime spot. Ray Thomas, their banker, called them last Wednesday with word that the store, which had agreed to take the space they just leased, had canceled. Eighteen months ago when the mall had put this location up for lease, they were not in a financial condition to make a commitment. In the last 18 months, however, business has been exceptional. The city has grown and the college has experienced expanded enrollments. By next Monday morning, Mike and Earl must provide the mall developer with a complete layout for their new store so the developer can assign an emergency work crew to complete the store for the grand opening.
College Men's Unlimited is a full-line men's store offering middle- to upper-quality traditional men's wearing apparel. The present location is an old two-story house that Mike and Earl converted into their combination business and living area. The house has 4,000 square feet of area, 3,600 being used for the store, and the rest for a three-room apartment. The new store has a 30-foot front and is 70 feet deep. The mall developer is willing to put up walls for storage and office space wherever they wish.
-Assuming that the new store space is 2,100 square feet (30' × 70'), and that the shape is rectangular, draw a layout for the new men's store. What merchandise should be placed where? What size office space and storage is needed? Where should counters be placed?

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted and actual overhead costs due to variations in production volume.

Machine Breakdowns

Unplanned events where machinery or equipment fails to function correctly, leading to production delays, increased maintenance costs, and potential operational losses.

Increase In Utility Costs

A rise in the expenses associated with utilities such as electricity, water, and gas consumed by a business or individual.

Purchase Price Variances

Differences between the actual cost of materials purchased and the expected (budgeted) cost, often analyzed in cost accounting.