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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.
Selling price per unit
Variable costs per unit
Variable selling and admin. exp.
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.
Segmented Income Statement
For the period ending Dec. 31, 2011
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