Bentton Group

From the book managerial Accounting for Managers by Noreen, Brewer, and Garrison Research and occupation 5-34 The questions in this exercise are based on the Benetton company, a company headquartered in Italy and known in the United States primarily for single of its brands of fashion apparel-United color in of Benetton. To act the questions, you will need to download the Benetton Groups 2004 Annual Report at www. benetton. com/investors . You do not need to print this document to answer the questions. Required 1.How do the formats of the income statements shown on pages 33 and 50 of Benettons one-year report differ from one another (disregard every subject beneath the line titled income from trading trading operations)? Which expenses shown on page 50 appear to assimilate been reclassified as variable selling costs on page 33? 2. why do you thing cost of gross revenue is included in the computation of contri scarceion margin on page 33? 3. Perform two sepa send computation s of Benettons break-even oral sex in euros. For the first computation, use data from 2003. For the scrap computation, use data from 2004.Why do the come that you computed differ from one another? 4. What sales gaudiness would piddle been necessary in 2004 for Benetton to attain a target income from operations of 300 one thousand thousand? 5. bet Benettons margin of safety using data from 2003 and 2004. Why do your answers for the two years differ from one another? 6. What is Benettons degree of direct leverage in 2004? If Benettons sales in 2004 had been 6% higher than what is shown in the annual report, what income from operations would the company have earned?What percentage attach in income from operations does this represent? 7. What income from operations would Benetton have earned in 2004 if it had invested an additive 10 million in advertising and promotions and realized a 3% adjoin in sales? As an alternative, what income from operations would Benetton have earne d if it not only invested an additional 10 million in advertising and promotions but also raised its sales commission rate to 6% of sales, thereby generating a 5% increase in sales? Which of these two scenarios would have been favorite(a) for Benetton? . Assume that total sales in 2004 remained unaltered at 1,686 million (as shown on pages 33 and 50) however, the effortless sector sales were 1,554 million, the Sportswear and Equipment sector sales were 45million, and the Manufacturing and Other sector sales were 87 million. What income from operations would Benetton have earned with this sales mix? (Hint carry at pages 36 and 37 of the annual report. ) Why is the income from operations under this scenario different from what is shown in the annual report?