Prairie Electronics, located in Regina, manufactures three product lines: (1) high-end speakers, (2) personal computers, and (3) handheld devices. For 2020, it compiled the following budgeted data: High-end SpeakersPersonal ComputersHandheld DevicesTotalSales (in units) 310,000 520,000 410,000 Price (per unit)$2,000 $1,220 $345 Variable costs per unit: Direct materials$440 $440 $85 Direct labour 150 80 15 Overhead 110 70 35 Shipping 90 20 8 Sales commissions 100 30 6 Direct fixed costs: Salaries$55,010,000 $64,810,000 $34,580,000 Utilities 36,860,000 55,750,000 10,720,000 Depreciation 52,730,000 153,900,000 25,940,000 Common fixed costs: Corporate salaries $28,680,000Building depreciation 23,920,000Legal & accounting 35,470,000Other 10,720,000 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.)

The contribution margin is calculated as difference between sales and variable costs. The segment…

Answered: Prairie Electronics, located in Regina,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prairie Electronics, located in Regina, manufactures three product lines: (1) high-end speakers, (2) personal computers, and (3) handheld devices. For 2020, it compiled the following budgeted data:

	High-end Speakers	Personal Computers	Handheld Devices	Total
Sales (in units)		310,000			520,000		410,000
Price (per unit)	$	2,000		$	1,220	$	345
Variable costs per unit:
Direct materials	$	440		$	440	$	85
Direct labour		150			80		15
Overhead		110			70		35
Shipping		90			20		8
Sales commissions		100			30		6
Direct fixed costs:
Salaries	$	55,010,000		$	64,810,000	$	34,580,000
Utilities		36,860,000			55,750,000		10,720,000
Depreciation		52,730,000			153,900,000		25,940,000
Common fixed costs:
Corporate salaries								$	28,680,000
Building depreciation									23,920,000
Legal & accounting									35,470,000
Other									10,720,000

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.)

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