Prairie Electronics, located in Regina, manufactures three product lines: (1) hi

Question

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 390,000 Sales (in units) Price 600,000 1,300 490,000 425 (per unit) 1,700 S Variable costs per unit 440 $ 120 110 60 70 35 40 35 380 $ Direct materials Direct labour Overhead Shipping Sales commissions 130 90 70 80 Direct fixed costs Salaries Utilities Depreciation $ 72,970,000 $ 79,700,000 $50,900,000 15,790,000 38,180,000 48,890,000 69,930,000 62,400,000 127,750,000 Common fixed costs Corporate salaries Building depreciation Legal & accounting $ 42,210,000 35,220,000 52,230,000 14,310,000 Other

Explanation / Answer

Prairie Electronics 1&2 Segment Performance Report Particulars Profit Centers High End speakers Personal Computers Handheld devices Total Sale Units                                    3,90,000                                6,00,000                     4,90,000 Price                                          1,700                                      1,300                               425 Sales                           66,30,00,000                        78,00,00,000             20,82,50,000     1,65,12,50,000 Less: Variable cost Direct Material                           14,82,00,000                        26,40,00,000               1,71,50,000 Direct Labour                              5,07,00,000                          7,20,00,000               1,96,00,000 Overhead                              3,51,00,000                          6,60,00,000               1,71,50,000 Shipping                              2,73,00,000                          3,60,00,000                   39,20,000 Sales commission                              3,12,00,000                          4,20,00,000                   19,60,000 Total Variable costs                           29,25,00,000                        48,00,00,000               5,97,80,000         83,22,80,000 Contribution                           37,05,00,000                        30,00,00,000             14,84,70,000         81,89,70,000 Less: Direct Fixed Costs Salaries                              7,29,70,000                          7,97,00,000               5,09,00,000 Utlities                              4,88,90,000                          6,24,00,000               1,57,90,000 Depreciation                              6,99,30,000                        12,77,50,000               3,81,80,000 Total Fixed cost                           19,17,90,000                        26,98,50,000             10,48,70,000         56,65,10,000 Segment Profit                           17,87,10,000                          3,01,50,000               4,36,00,000         25,24,60,000 Less: Common fixed cost Corporate salaries           4,22,10,000 Building Depreciation           3,52,20,000 Legal& accounting           5,22,30,000 Other           1,43,10,000 Total Common fixed cost         14,39,70,000 Net Profit         10,84,90,000 Contribution Margin % (Contribution/Sales) 55.9% 38.5% 71.3% Segment Margin %(Segment Profit/Sales) 27.0% 3.9% 20.9% 3-a Particulars Profit Centers High End speakers Personal Computers Handheld devices Total Segment Profit                           17,87,10,000                          3,01,50,000               4,36,00,000         25,24,60,000 Less: Common fixed cost Allocated portion (143,970,000/3)                              4,79,90,000                          4,79,90,000               4,79,90,000         14,39,70,000 Net Income/(loss)                           13,07,20,000                        -1,78,40,000                 -43,90,000         10,84,90,000

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