Diversified Products, Inc., has recently acquired a small publishing company that offers three books for salea cookbook, a travel guide, and a handy speller. Each book sells for $15. The publishing companys most recent monthly income statement is given below:

For this homework assignment how do you find the warehouse rent and equipment depreciation for all segements.

The same equipment is used to produce all three books, so the equipment depreciation cost has been allocated equally among the three product lines. An analysis of the companys activities indicates that the equipment is used 40% of the time to produce cookbooks, 50% of the time to produce travel guides, and 10% of the time to produce handy spellers.

Only printing costs and sales commissions are variable; all other costs are fixed. The printing costs (which include materials, labor, and variable overhead) are traceable to the three product lines as shown in the statement above. Sales commissions are 10% of sales for any product.

The warehouse is used to store finished units of product, so the rental cost has been allocated to the product lines on the basis of sales dollars. The warehouse rental cost is $3 per square foot per year. The warehouse contains 52,000 square feet of space, of which 8,200 square feet is used by the cookbook line, 25,000 square feet by the travel guide line, and 18,800 square feet by the handy speller line.

Subject is Managerial Accounting

Sales Expenses Printing costs Advertising General sales Salaries Equipment depreciation Sales commissions General administration Warehouse rent Depreciation--office facilities Total expenses Net operating income (loss) Product Line Total Travel Handy Company Cookbook Guide Speller $100,000 160,000 65,000 107,000 32,000 63,500 11,500 41,000 14.000 22.000 5.000 9,600 3.900 19.500 6.000 38.000 23.000 9.500 5.500 7.200 2.400 2.400 2.400 32,500 10,000 16.000 6.500 43,500 14.500 14.500 14,500 13.000 4.000 6.400 2.600 4,500 1,500 1.500 1.500 306.200 107,400 145.400 53,400 18,800 (7,400) 14,600 11,600