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






 Prod A

Prod B

Beginning inventory




Units produced




Units sold








Selling price per unit




Variable costs per unit




  Direct material




  Direct labor




  Variable overhead




  Variable selling and admin. exp.








Fixed costs




  Fixed manufacturing overhead




  Fixed selling and administrative











Production runs (not $)




Number of sales reps (not $)




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










Variable costs:




  Direct material








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

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