Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. q1 a company is making a study of the relative pro

Q1 A company is making a study of the relative profitability of the two products-A...

70.2K

Verified Solution

Question

Accounting

image

Q1 A company is making a study of the relative profitability of the two products-A and B. In addition to direct costs, indirect selling and distribution costs to be allocated between the two products are as under: Insurance charges for inventory (finished) $78,000; Storage costs $1,40,000; Packing and forwarding charges $ 7,20,000 ; Salesmen salaries $ 8,50,000; Invoicing costs $ 4,50,000. Other details are : Product A Product B Selling price per unit ($) 500 1,000 Cost per unit (exclusive of indirect selling and distribution cost) ($) 300 600 Annual sales in units 10,000 8,000 Average inventory (units) 1,000 800 Number of invoices 2,500 2,000 One unit of product A requires a storage space twice as much as product B. The cost to pack and forward one unit is the same for both the products. Salesmen are paid salary plus commission @ 5% on sales and equal amount of efforts are put forth on the sales of each of the products. Required: (i) Set up a schedule showing the apportionment of the indirect selling and distribution costs between the two products, (ii) Prepare a statement showing the relative profitability of the two products

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

A ski jumper starts from rest from point A at the top of a hill that...

General Management
1.2K views

5. The Coca-Cola World service process is demand- or capacity-constrained? 6. How could Coca-Cola World improve its...

Biology
1.2K views

Select the correct text in the passage. Which sentence describes the action of natural selection?...

Physics
1.2K views

A concavo convex lens of radii of curvatures 20 cm 10 cm respectively silvered on...

Calculus
1.2K views

Bonus A bridge is built in the shape of a semielliptical arch The bridge has...

Calculus
1.2K views

Let f x 12 sin x 9 cos x

Accounting
1.2K views

Please show your steps. On January 1, 2017, the dental partnership...

Accounting
1.2K views

What does an order to pay include? A. Demand Draft ...

Accounting
1.2K views

Part 1 | Attempt 1/6 for 10 pts. Kate Milling has calculated that she'll need...

Accounting
1.2K views

LeBron James (LBJ) Corporation agrees on January 1, 2020, to lease equipment from Carla Vista,...

Accounting
1.2K views

In southwestern PA is the average household income better now (adjusted for time value) or...

Finance
1.2K views

In an attempt to reconstruct an owner's operating statement for an apartment complex, you have...