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Details of sales for January were as follows. Musgrove Ltd Danes Ltd Other Total Honey Jam 100,000 units 50,000 units Customers 30,000 units 180,000


 

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Details of sales for January were as follows. Musgrove Ltd Danes Ltd Other Total Honey Jam 100,000 units 50,000 units Customers 30,000 units 180,000 units 50,000 units 25,000 units 15,000 units 90,000 units Selling and Administration overheads attributable to customers were 102,000 for the month of January. These costs are allocated to customers on an Activity Based Costing (ABC) basis as follows: Cost Cost Cost Driver Musgrove Danes Ltd Classification Ltd Other Customers Order 60,500 Sales Orders 100 75 75 Processing Delivery 31,000 Kilometres 11,000 10,000 10,000 Costs Travelled Sales Visits Total 10,500 102,000 No of visits 15 20 15 Conserves Ltd has collected the cost information associated with both products as follows. Prime Cost Total Product Cost Honey 1.75 per unit 2.50 per unit Jam 1.50 per unit 2.00 per unit The company sets the selling price by adding 60% mark up to the total product cost. REQUIRED: a) Prepare a schedule showing the Gross Profit and Selling price of both products (5 Marks) b) Prepare a customer profitability analysis (CPA) statement for both Musgrove Ltd and Danes Ltd. (15 Marks) c) Comment on any significant findings from your analysis above. (5 Marks) TOTAL: 25 MARKS APPENDIX 1 - FINANCIAL FORMULAE ECONOMIC ORDER QUANTITY: (2DC)/H

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