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.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 16E
Related questions
Question
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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,