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
Which of the following are easy to trace to individual jobs?:   A. direct materials and overhead B. direct materials and direct labor C. direct labor and overhead

Budgeted direct labour cost 75000 hours @ $16 per hour Budgeted manufacturing overhead 80 000 hours @ $17.50 per hour Actual direct labour cost $997 500 Budgeted manufa

Suppose the Danny can prepare 50 pizzas or 100 sandwiches in an hour and Steve can produce 15 pizzas or 9 sandwiches. a) Draw each individual's PPF. b) Calculate the oppor

Wayne Company's beginning and ending inventories for the month of June were as follows: June 1 June 30 Work in progress $145,000 171,000 Finished Goods 85,000 78,000 Production


Standard Cost A predetermined cost is representing the ideal or norm achievable through an organization. Standard costs form the basis of a standard cost system used extensivel

what is the equivalent unit for materials? if the cost of normal lots units are absorbed by the units transferred out to the next department the work in process- beginning (60% com

The manufacturing division of an electronics company uses activity-based costing. The company has identified three activities and the related cost drivers for indirect production c

Production of a particular product costs $50 per material, $80 per labour and variable overhead is 75% of labour cost. If the selling price per unit is $230 and fixed cost amounts

A company started with $0 in direct materials, purchased $5,000 of materials, and ended with $300 in materials. Direct labor equaled $4,000. The applied overhead for the period was