Calculate the fixed costs to the two products, Cost Accounting

Herrestad Company does produce and sell two products and the details below will be used to prepare a segmented income statement (showing the income for each product and the total) for the company. Use ABC to allocate all fixed costs to the two products.

Background information

 

 

 

 

 Total

 Prod A

Prod B

Beginning inventory

 0  

 

 

Units produced

 10,000

 2,500

 7,500

Units sold

 8,000

 2,000

 6,000

 

 

 

 

Selling price per unit

 $300

 540

 220

Variable costs per unit

 

 

 

  Direct material

 120

 270

 70

  Direct labor

 90

 60

 60

  Variable overhead

 40

 85

 25

  Variable selling and admin. exp.

 10

 13

 9

 

 

 

 

Fixed costs

 

 

 

  Fixed manufacturing overhead

 250,000

 

 

  Fixed selling and administrative

 100,000

 

 

 

 

 

 

 


 

 

Production runs (not $)

100

75

25

Number of sales reps (not $)

 30

20

10

Here are the first few lines of the segmented income statement to help you get started. Complete the statement in good format and make sure you allocate the fixed costs to the two products. When done, comment on the information and the relative profitability of the two products.

Herrestad Company

Segmented Income Statement

For the period ending Dec. 31, 2011

 

 A

 B

 Total

Sales

 $1,080,000

 

 $1,320,000

 $2,400,000

Variable costs:

 

 

 

  Direct material

 540,000

 420,000

 960,000

 

 

 

 

The submission should be 2 to 4 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.

Posted Date: 3/23/2013 1:45:13 AM | Location : United States







Related Discussions:- Calculate the fixed costs to the two products, Assignment Help, Ask Question on Calculate the fixed costs to the two products, Get Answer, Expert's Help, Calculate the fixed costs to the two products Discussions

Write discussion on Calculate the fixed costs to the two products
Your posts are moderated
Related Questions
for financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

Shrinkage - Production Process This refers to a disappearance or loss of material inputs utilized throughout the production process. It happens mainly via the evaporation. Thi

Sales Budget It provides volume of sales and sales mix of the recent operations. The sales forecast is initially prepared and upon completion the sales budget is finalized. Th

Your company completed the East Side subdivision. The costs are shown in Figure 11-4. The site concrete labor and outside lighting were done by subcontractors. The grading and exca

1. The table below gives data for Southland where there are three consumption goods: bananas, coconuts and grapes. Goods Quantity in base period basket

In a given period production and cost data were as follows:     Total Costs   Materials   Rs. 5,115                      Labour          3,952                     Overheads


Allocation of Service Department Costs Allocation of Service Department Costs to Production departments ,Service departments are those departments that provide support to prod

formula for calculting WACC

budget preparation