Harrison and Son Ltd is a small company that produces snowboarding equipment. The company makes three products, A, B and C, but they have decided to discontinue product C because of low market response to the product. They need to prepare the new segmented statements for the company and for each product. The manager is familiar with ABC and he has been assigning cost using the ABC approach. The fixed costs include, and are assigned, as follows:
Rent of warehouse: The business currently rents a warehouse for £4,875. It rents 400 square metres for product A and 250 square metres for product B. It used to rent an extra 200 square metres for product C but has changed the rent agreement since the decision to discontinue the product. Purchasing order: The total cost is £5,700, from which 500 orders are assigned to product A and 450 to product B. Managing director: The managing director is paid £12,000 and he oversees the entire production. Administration cost: The total cost for administration is £10,000 and the manager has decided to allocate 40% to product A and 60% to product B based on previous cost evaluations. The total revenue for the company is £120,000, from which £50,000 comes from product A and the rest from product B. The total variable cost is £60,000, from which £25,000 comes from product A and the rest from product B.

Required
1. Based on the information provided above, identify the traceable and common fixed costs.
2. Calculate the total traceable costs for products A and B.
3. Prepare the segmented statement for the company and for both products.
4. What would be the consequence for the assignment of warehouse cost when discontinuing product C if the company owns instead of rents the warehouse?