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: Total High-End Speakers 420,000 $ 1,500 Personal Computers 630,000 $ 1,330 Handheld Devices 520,000 455 410 110 $ 360 130 120 70 50 70 60 80 Sales (in units) Price (per unit) Variable costs per unit: Direct materials Direct labour Overhead Shipping Sales commissions Direct fixed costs: Salaries Utilities Depreciation Common fixed costs: Corporate salaries Building depreciation Legal & accounting Other $ 80,100,000 53,670,000 76,770,000 $ 85,610,000 67,030,000 147,230,000 $57,830,000 17,940,000 43,380,000 $ 47,960,000 40,010,000 59,340,000 36,260,000

Answer 1

PRAIRIE ELECTRONICS Segment Performance Report
	Profit Centres
	High-End speakers	Personal computers	Handheld devices	Total company
Sales	$630,000,000	$837,900,000	$236,600,000	$1,704,500,000
Less: Variable cost
Direct material	172,200,000	226,800,000	36,400,000	435,400,000
Direct labour	46,200,000	81,900,000	13,000,000	141,100,000
Overhead	29,400,000	75,600,000	7,800,000	112,800,000
Shipping	21,000,000	44,100,000	3,120,000	68,220,000
Sales commissions	25,200,000	50,400,000	1,040,000	76,640,000
Total variable expenses	294,000,000	478,800,000	61,360,000	834,160,000
Contribution margin	336,000,000	359,100,000	175,240,000	870,340,000
Less: Direct fixed costs:
Salaries	80,100,000	85,610,000	57,830,000	223,540,000
Utilities	53,670,000	67,030,000	17,940,000	138,640,000
Depreciation	76,770,000	147,230,000	43,380,000	267,380,000
Total fixed costs	210,540,000	299,870,000	119,150,000	629,560,000
Segment margin	125,460,000	59,230,000	56,090,000	240,780,000
Less: Common fixed costs:
Corporate salaries				47,960,000
Building depreciation				40,010,000
Legal & accounting				59,340,000
Other				36,260,000
Total common fixed costs				183,570,000
Net income				57,210,000
Contribution margin %	53.3%	42.9%	74.1%
Segment margin %	19.9%	7.1%	23.7%

PRAIRIE ELECTRONICS Segment Performance Report
	Profit Centres
	High end speakers	Personal computers	Handheld devices	Total company
Segment margin	$125,460,000	$59,230,000	$56,090,000	$240,780,000
Less: Common fixed expenses
Allocated portion	61,190,000	61,190,000	61,190,000	61,190,000
Net income (loss)	$64,270,000	-$1,960,000	-$5,100,000	$57,210,000