Question
In: Accounting
Prairie Electronics, located in Regina, manufactures three product lines: (1) high-end speakers, (2) personal computers, and...
|
Prairie Electronics, located in Regina, manufactures three product lines: (1) high-end speakers, (2) personal computers, and (3) handheld devices. For 20X5, it compiled the following budgeted data: |
|
High-End Speakers |
Personal Computers |
Handheld Devices |
Total | |||||
| Sales (in units) | 400,000 | 610,000 | 500,000 | |||||
| Price (per unit) | $ | 1,500 | $ | 1,310 | $ | 435 | ||
| Variable costs per unit: | ||||||||
| Direct materials | $ | 430 | $ | 360 | $ | 35 | ||
| Direct labour | 100 | 80 | 50 | |||||
| Overhead | 60 | 70 | 35 | |||||
| Shipping | 40 | 20 | 10 | |||||
| Sales commissions | 50 | 30 | 4 | |||||
| Direct fixed costs: | ||||||||
| Salaries | $ | 75,320,000 | $ | 81,650,000 | $ | 53,160,000 | ||
| Utilities | 50,470,000 | 85,030,000 | 16,490,000 | |||||
| Depreciation | 72,190,000 | 240,880,000 | 39,880,000 | |||||
| Common fixed costs: | ||||||||
| Corporate salaries | $ | 44,080,000 | ||||||
| Building depreciation | 36,780,000 | |||||||
| Legal & accounting | 54,550,000 | |||||||
| Other | 14,950,000 | |||||||
| Required: |
| 1. & 2. |
Prepare a segmented performance report; Compute the contribution margin percentage and segment margin percentage. (Round "Percentage" answers to 1 decimal place, (i.e., 0.123 should be considered as 12.3%).) |
| 3-a. |
Allocate the common fixed expenses equally to the three segments and prepare a performance report. (Negative amounts should be indicated with a minus sign.) |
Solutions
Expert Solution
| Prairie Electronics | |||||||
| 1&2 Segment Performance Report | |||||||
| Particulars | Profit Centers | Company as Whole | |||||
| Per Unit | High End speakers | Per Unit | Personal Computers | Per Unit | Handheld devices | ||
| Sale Units | 400000 | 610000 | 500000 | ||||
| Sales | $1,500 | $60,00,00,000 | $1,310 | $79,91,00,000 | $435 | $21,75,00,000 | $1,61,66,00,000 |
| Less: Variable cost | |||||||
| Direct Material | $430 | $17,20,00,000 | $360 | $21,96,00,000 | $35 | $1,75,00,000 | |
| Direct Labour | $100 | $4,00,00,000 | $80 | $4,88,00,000 | $50 | $2,50,00,000 | |
| Overhead | $60 | $2,40,00,000 | $70 | $4,27,00,000 | $35 | $1,75,00,000 | |
| Shipping | $40 | $1,60,00,000 | $20 | $1,22,00,000 | $10 | $50,00,000 | |
| Sales commission | $50 | $2,00,00,000 | $30 | $1,83,00,000 | $4 | $20,00,000 | |
| Total Variable costs | $680 | $27,20,00,000 | $560 | $34,16,00,000 | $134 | $6,70,00,000 | $68,06,00,000 |
| Contribution | $32,80,00,000 | $45,75,00,000 | $15,05,00,000 | $93,60,00,000 | |||
| Less: Direct Fixed Costs | |||||||
| Salaries | $7,53,20,000 | $8,16,50,000 | $5,31,60,000 | ||||
| Utlities | $5,04,70,000 | $8,50,30,000 | $1,64,90,000 | ||||
| Depreciation | $7,21,90,000 | $24,08,80,000 | $3,98,80,000 | ||||
| Total Fixed cost | $19,79,80,000 | $40,75,60,000 | $10,95,30,000 | $71,50,70,000 | |||
| Segment Profit | $13,00,20,000 | $4,99,40,000 | $4,09,70,000 | $22,09,30,000 | |||
| Less: Common fixed cost | |||||||
| Corporate salaries | $4,40,80,000 | ||||||
| Building Depreciation | $3,67,80,000 | ||||||
| Legal& accounting | $5,45,50,000 | ||||||
| Other | $1,49,50,000 | ||||||
| Total Common fixed cost | $15,03,60,000 | ||||||
| Net Profit | $7,05,70,000 | ||||||
| Contribution Margin % (Contribution/Sales) | 54.67% | 57.25% | 69.20% | ||||
| Segment Margin %(Segment Profit/Sales) | 21.67% | 6.25% | 18.84% | ||||
| 3-a | |||||||
| Particulars | Profit Centers | ||||||
| High End speakers | Personal Computers | Handheld devices | Total | ||||
| Segment Profit | $13,00,20,000 | $4,99,40,000 | $4,09,70,000 | $22,09,30,000 | |||
| Less: Common fixed cost | |||||||
| Allocated portion (150360000/3) | $5,01,20,000 | $5,01,20,000 | $5,01,20,000 | $15,03,60,000 | |||
| Net Income/(loss) | $7,99,00,000 | -$1,80,000 | -$91,50,000 | $7,05,70,000 | |||
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