Develop a profit-and-loss statement for the Westgate division of North Industries. This division manufactures light fixtures sold to consumers through home improvement and hardware stores. Cost of goods sold represents 40 per cent of net sales. Marketing expenses include selling expenses, promotion expenses and freight. Selling expenses include sales salaries totalling €3 million per year and sales commissions (5 per cent of sales). The company spent €3 million on advertising last year, and freight costs were 10 per cent of sales. Other costs include €2 million for managerial salaries and expenses for the marketing function and another €3 million for indirect overhead allocated to the division. Develop the profit-and-loss statement if net sales were €20 million last year. Develop the profit-and-loss statement if net sales were €40 million last year. Calculate Westgate’s break-even sales?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Develop a profit-and-loss statement for the Westgate division of North Industries. This division manufactures light fixtures sold to consumers through home improvement and hardware stores. Cost of goods sold represents 40 per cent of net sales. Marketing expenses include selling expenses, promotion expenses and freight. Selling expenses include sales salaries totalling €3 million per year and sales commissions (5 per cent of sales). The company spent €3 million on advertising last year, and freight costs were 10 per cent of sales. Other costs include €2 million for managerial salaries and expenses for the
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