Sale segment income statement digital watches sales

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Unformatted text preview: xpenses Variable manufacturing costs $ 120,000 Variable shipping costs 5,000 Commissions 75,000 200,000 Contribution margin $ 300,000 Less: fixed expenses General factory overhead $ 60,000 Salary of line manager 90,000 Depreciation of equipment 50,000 Advertising - direct 100,000 Rent - factory space 70,000 General admin. expenses 30,000 400,000 Net operating loss $ (100,000) Separate Product Costs Joint Products: Process further vs. Sell Sawmill, Inc. cuts logs from which unfinished lumber and sawdust are the immediate joint products. Unfinished lumber is sold “as is” or processed further into finished lumber. Sawdust can also be sold “as is” to gardening wholesalers or processed further into “presto-logs.” Sales value at the split-off point Sales value after further processing Allocated joint product costs Cost of further processing Per Log Lumber Sawdust $ 140 $ 40 270 176 50 50 24 20 Joint Products: Process further vs. Sell Analysis of Sell or Process Further Per Log Lumber Sales value after further processing Sales value at the split-off point I ncremental revenue Cost of further processing Profit (loss) from further processing Sawdust $ $ $ 270 140 130 50 80 $ Are joint costs relevant in this case ? What is the rule of thumb here ? 50 40 10 20 (10) Maximize Profits with Limited Resources Ensign Company produces two products and selected data are shown below: Product 2 1 Selling price per unit Less variable expenses per unit Contribution margin per unit Current demand per week (units) Contribution margin ratio Processing time required on machine A1 per unit $ 60 36 $ 24 2,000 40% 1.00 min. $ 50 35 $ 15 2,200 30% 0.50 min. Machine A1 is the constrained resource and is being used at 10...
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This document was uploaded on 03/06/2014.

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