Allocation and fixed costs herrestad company does produce

Assignment Help Accounting Basics

Reference no: EM13606244

SLP 2 Allocation and Fixed Costs 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.

Reference no: EM13606244

Questions Cloud

Explain how you can experimentally measure poissons ratio : consider a metal that is subjected to cold working by rolling it to a lesser thickness or hammering it. a would you

Callaghan motors bonds have 9 years remaining to maturity : callaghan motors bonds have 9 years remaining to maturity. interest is paid annually they have a 1000 par value the

Sheena can row a boat at 288 mih in still water she needs : sheena can row a boat at 2.88 mih in still water. she needs to cross a river that is 1.29 mi wide with a current

Hooper printing inc has bonds outstanding with 9 years left : hooper printing inc. has bonds outstanding with 9 years left to maturity. the bonds have an 8 annual coupon rate and

Allocation and fixed costs herrestad company does produce : slp 2 allocation and fixed costs herrestad company does produce and sell two products and the details below will be

A certain car is capable of accelerating at a rate of 059 : a certain car is capable of accelerating at a rate of 0.59 ms2. how long does it take for this car to go from a speed

Users of financial statements rely on the information : users of financial statements rely on the information available to them to decide whether to invest in a company or

If you require an effective annual interest rate not a : you are considering a 30-year 1000 par value bond. its coupon rate is 11 and interest is paid semiannually. if you

Imperial jewelers is considering a special order for 20 : imperial jewelers is considering a special order for 20 handcrafted gold bracelets to be given as gifts to members of a

User Account

All Pages