ABC Manufacturing Ltd. manufacture electrical parts. Data for two of the company's customers is as follows:
Customer A | Customer B | |
Revenue at list price | $592,500 | $102,000 |
Units Sold | 75,000 | 10,000 |
Unit list price | $7.90 | $10.20 |
Cost of goods per unit | $5.10 | $6.25 |
Sales discounts | $11,850 | $1,020 |
Customer - specific costs | ||
Order-taking | $13,600 | $1,500 |
Product-handling | $14,100 | $1,350 |
Delivery | $9,400 | $1,290 |
Require
a) Prepare a comparative income statement in gross margin format with one column for each customer; present customer-specific costs as period expenses.
Customer A | Customer B | ||
Units Sold | A | 75,000 | 10,000 |
Unit Selling Price | B | 7.90 | 10.20 |
Sales Revenue | C = A*B | 5,92,500 | 1,02,000 |
Cost of Goods Sold (per unit) | D | 5.1 | 6.25 |
Total Cost of Goods Sold | E = A * D | 3,82,500 | 62,500 |
Gross Margin | F = C - E | 2,10,000 | 39,500 |
Order Cost | G | 13,600 | 1,500 |
Product handling | H | 14,100 | 1,350 |
Delivery | I | 9,400 | 1,290 |
Net Income | J = F - G - H - I | 1,72,900 | 35,360 |
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ABC Manufacturing Ltd. manufacture electrical parts. Data for two of the company's customers is as follows:...