Blue Ridge Manufacturing
Segmented Income Statement
		Designer	Children's	Sports	Total
Sales		$3,464,915	$3,246,587	$1,739,510	$8,451,012
Less:
Variable product costs		1,829,464	1,977,798	1,137,225	4,944,487
Commissions		236,805	256,006	147,202	640,013
Contribution Margin		$1,398,646	$1,012,783	$455,083	$2,866,512
Less:
Indirect expenses		687,601	497,903	223,728	1,409,232
Income		$711,045	$514,880	$231,355	$1,457,280

Blue Ridge Manufacturing
ABC Analysis of Indirect Costs
				Activity Measure Used By:
Activity Cost Pool	Amount		Activity Measure	Designer	Children's	Sports
Designer Pay	$488,260		Hours worked	10,105	3,857	14,760
Supervisory pay	163,176		Hours worked	76,411	82,606	47,498
Samples	218,711		Number of items	2,223	2,224	1,229
Setup costs	76,220		Number of setups	15,806	15,807	11,290
Travel for design	47,266		Travel hours	3,985	2,213	6,476
Scheduling	67,142		Number of orders	246	1,870	11,990
Customer service	13,369		Number of calls	118	882	13,580
Design office costs	7,925		Square feet occupied	900	811	1,004
Supervisory, setup, and
schedulers office costs	66,665		Square feet occupied	1,800	1,622	2,008
Inspection	13,501		Number of inspections	1,897	1,297	7,113
Purchasing	175,356		Number of unique items	1,870	246	11,990
Materials handling	71,641		Number of material moves	118	882	13,580
Total Costs	$1,409,232

Use an Excel spreadsheet to determine the amount of indirect costs that would be attributable to each product line using activity-based costing (ABC). Data is in the ABC Analysis tab of the Blue Ridge Case Data file.

Using sales, variable product costs, and commissions originally given (in the Segmented Income Statement tab of the Excel file), and your findings from part one, recalculate the profitability of each product line (using an Excel spreadsheet). You will basically be replacing the indirect cost row in the spreadsheet in the Segmented Income Statement with your answers to part one, and recalculating income for each product line. The total indirect costs and the total income will be the same. The amounts for each product line will just be different than those originally given.