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How do I calculate the units (skeins) sold and unit cost per orderof a given size? Please see attachment. Redwood Company sells craft kits and
How do I calculate the units (skeins) sold and unit cost per orderof a given size? Please see attachment.
Redwood Company sells craft kits and supplies to retail outlets and through its catalog. Some of the items are m After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson Cost Category Amount Sales commissions $ 796,500 Catalogs 517,000 Cost of catalog sales 198,000 Credit and collection 84,000 Total selling costs $ 1,595,500 The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is n Order Size Catalog Sales Retail Sales Small 1-10 skeins 1-10 boxes Medium 11-20 skeins 11-20 boxes Over 20 skeins Over 20 boxes Large An analysis of the previous year's records produced the following statistics. Small Retail sales in boxes (12 skeins per box) Catalog sales in skeins Number of retail orders Catalogs distributed Order Size Medium Large 5,000 67,500 193,000 94,000 67,000 59,000 635 3,165 6,700 196,400 297,600 152,250 Required: 1. Prepare a schedule showing Redwood Company's total selling cost for each order size and the per-skein sellin Redwood Company Compution of sales costs by order size and per skein within each small Sales commissions Catalogs Cost of calalog sales Credit and Collection Total cost for all orders of a given size Units (skeins) sold Unit cost per order of a given size 15,000 157,120 84,600 5,080 261,800 An analysis of selling costs shows. (You may select more than one answer. Highlight the correct answer ) Management may want to consider offering discounts for large orders. Small orders are preferable to medium sized orders Large orders are preferable to medium sized orders Marketing should be focused on small sized orders log. Some of the items are manufactured by Redwood, while others are purchased for resale. For the products it manufactu ins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. T Cost Driver Boxes of yarn sold to retail stores Catalogs distributed Skeins sold through catalog Number of retail orders The sale of partial boxes is not permitted. Commissions are paid on sales to retail outlets but not on catalog sales. The cos Total 265,500 220,000 10,500 646,250 er size and the per-skein selling cost within each order size. (Round your intermediate calculations and unit cost per ord od Company tion of sales costs er size and per skein within each order size Order size Medium rect answer ) 202,500 60,300 25,320 238,080 526,200 Large Total 579,000 796,500 53,100 270,520 53,600 163,520 121,800 364,960 807,500 1,595,500 or the products it manufactures, the company currently bases its selling prices on a product-costing system that accounts fo s for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: ot on catalog sales. The cost of catalog sales includes telephone costs and the wages of personnel who take the catalog ord ions and unit cost per order to 2 decimal places.) system that accounts for direct material, direct labor, and the associated overhead costs. In addition to these product costs, s are as follows: who take the catalog orders. Jackson believes that the selling costs vary significantly with the size of the order. Order sizes a to these product costs, Redwood incurs substantial selling costs, and Roger Jackson, controller, has suggested that these s the order. Order sizes are divided into three categories as follows: suggested that these selling costs should be included in the product pricing structureStep by Step Solution
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