ABC Co. Ltd. Manufacture three products X, Y and Z and sell them direct through their salesmen in three zones M, B and C. The overall control of distribution and sale is done centrally at headquarters which is also responsible for sales promotion. The analysis of sales, cost of sales and selling and distribution expenses for a year is as follows: Sales Selling and distribution expenses allocated direct Product Product Y Total Y Total $ $ $ Zone M: 75,000 Zone B: 1,00,000 50,000 25,000 5,190 7,110 1,50,000 5,300 2,660 13,150 2,50,000 50,000 55,000 | 1,00,000 1,00,000 9,385 5,240 21,735 Zone C: 25,000 20,000 2,100 1,685 7,375 11,160 Selling and distribution expenses at headquarters are as follows: Office expenses $ 10,500 ; Advertisement $ 15,000; Other expenses $ 13,500. Advertisement costs are allocated to zones and products on the basis of sales. The other two items of expenses are apportioned equally to the zones or the products while computing the profits or loss for the zonal or the product as the case may be. Costs of sales are : Product X 85 per cent of sales ; Product Y 80 per cent of sales ; Product Z 75 per cent of sales. Tabulate the above information to present comparative profit or loss statement for each zone and for each product and offer your recommendations.
ABC Co. Ltd. Manufacture three products X, Y and Z and sell them direct through their salesmen in three zones M, B and C. The overall control of distribution and sale is done centrally at headquarters which is also responsible for sales promotion. The analysis of sales, cost of sales and selling and distribution expenses for a year is as follows: Sales Selling and distribution expenses allocated direct Product Product Y Total Y Total $ $ $ Zone M: 75,000 Zone B: 1,00,000 50,000 25,000 5,190 7,110 1,50,000 5,300 2,660 13,150 2,50,000 50,000 55,000 | 1,00,000 1,00,000 9,385 5,240 21,735 Zone C: 25,000 20,000 2,100 1,685 7,375 11,160 Selling and distribution expenses at headquarters are as follows: Office expenses $ 10,500 ; Advertisement $ 15,000; Other expenses $ 13,500. Advertisement costs are allocated to zones and products on the basis of sales. The other two items of expenses are apportioned equally to the zones or the products while computing the profits or loss for the zonal or the product as the case may be. Costs of sales are : Product X 85 per cent of sales ; Product Y 80 per cent of sales ; Product Z 75 per cent of sales. Tabulate the above information to present comparative profit or loss statement for each zone and for each product and offer your recommendations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ABC Co. Ltd. Manufacture three products X, Y and Z and sell them direct through their
salesmen in three zones M, B and C. The overall control of distribution and sale is done centrally at
headquarters which is also responsible for sales promotion.
The analysis of sales, cost of sales and selling and distribution expenses for a year is as follows:
Sales
Selling and distribution expenses allocated direct
Product
Product
Y
Total
Y
Total
$
$
$
Zone M: 75,000
Zone B: 1,00,000
50,000
25,000
5,190
7,110
1,50,000
5,300
2,660
13,150
1,00,000
50,000
2,50,000
9,385
5,240
21,735
55,000 | 1,00,000
Zone C:
25,000
20,000
2,100
1,685
7,375
11,160
Selling and distribution expenses at headquarters are as follows:
Office expenses $ 10,500; Advertisement $ 15,000; Other expenses $ 13,500.
Advertisement costs are allocated to zones and products on the basis of sales. The other two items of
expenses are apportioned equally to the zones or the products while computing the profits or loss for
the zonal or the product as the case may be. Costs of sales are :
Product X 85 per cent of sales ; Product Y 80 per cent of sales ; Product Z 75 per cent of sales.
Tabulate the above information to present comparative profit or loss statement for each zone and for
each product and offer your recommendations.
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