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After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Sales commissions Pay-per-click/Search engine optimization Cost of online sales. Credit and collection Total selling costs The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is not permitted. Commissions are paid on sales to retail outlets but not on online sales. The cost of online sales includes technology infrastructure costs and the wages of personnel who process the online orders. Jackson believes that the selling costs vary significantly with the size of the order. Order sizes are divided into three categories as follows: Order Size Small Medium Large Online Sales 1 to 10 skeins 11 to 20 skeins Over 20 skeins Retail Sales 1 to 10 boxes 11 to 20 boxes Over 20 boxes An analysis of the previous year's records produced the following statistics. Items Retail sales boxes (12 skeins per box) Online sales, skeins Number of retail orders Number of online leads Cost Driver Amount $ 769,500 Boxes of yarn sold to retail stores 526,220 Number of online leads. 189,900 Skeins sold online 86,400 Number of retail orders $ 1,572,020 Small 3,500 91,000 605 469,310 Order Size Medium Large 190,000 56,000 5,980 436,530 146,600 63,000 64,000 3,015 Total 256,500 211,000 9,600 1,052,440

After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Sales commissions Pay-per-click/Search engine optimization Cost of online sales. Credit and collection Total selling costs The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is not permitted. Commissions are paid on sales to retail outlets but not on online sales. The cost of online sales includes technology infrastructure costs and the wages of personnel who process the online orders. Jackson believes that the selling costs vary significantly with the size of the order. Order sizes are divided into three categories as follows: Order Size Small Medium Large Online Sales 1 to 10 skeins 11 to 20 skeins Over 20 skeins Retail Sales 1 to 10 boxes 11 to 20 boxes Over 20 boxes An analysis of the previous year's records produced the following statistics. Items Retail sales boxes (12 skeins per box) Online sales, skeins Number of retail orders Number of online leads Cost Driver Amount $ 769,500 Boxes of yarn sold to retail stores 526,220 Number of online leads. 189,900 Skeins sold online 86,400 Number of retail orders $ 1,572,020 Small 3,500 91,000 605 469,310 Order Size Medium Large 190,000 56,000 5,980 436,530 146,600 63,000 64,000 3,015 Total 256,500 211,000 9,600 1,052,440

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 22E: Total cost method of product pricing Based on the data presented in Exercise 17, assume that Smart...
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Required: 1. Prepare a schedule showing TCC's total selling cost for each order size and the per-skein selling cost within each order size. Note: Round your intermediate calculations and unit cost per order to 2 decimal places. TEXTILE CRAFT COMPANY Computation of Selling Costs By Order Size and Per Skein Within Each Order Size Sales commissions Pay-per-click/Search engine optimization Cost of online sales Credit and collection Total cost for all orders of a given size Units (skeins) sold Unit cost per order of a given size $ $ Small 3,500 $ 3,500 $ Order Size Medium 63,000 $ 63,000 $ Large 190,000 $ 190,000 Total 256,500 0 0 0 256,500
Transcribed Image Text:Required: 1. Prepare a schedule showing TCC's total selling cost for each order size and the per-skein selling cost within each order size. Note: Round your intermediate calculations and unit cost per order to 2 decimal places. TEXTILE CRAFT COMPANY Computation of Selling Costs By Order Size and Per Skein Within Each Order Size Sales commissions Pay-per-click/Search engine optimization Cost of online sales Credit and collection Total cost for all orders of a given size Units (skeins) sold Unit cost per order of a given size $ $ Small 3,500 $ 3,500 $ Order Size Medium 63,000 $ 63,000 $ Large 190,000 $ 190,000 Total 256,500 0 0 0 256,500
After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Sales commissions Pay-per-click/Search engine optimization Cost of online sales Credit and collection Total selling costs The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is not permitted. Commissions are paid on sales to retail outlets but not on online sales. The cost of online sales includes technology infrastructure costs and the wages of personnel who process the online orders. Jackson believes that the selling costs vary significantly with the size of the order. Order sizes are divided into three categories as follows: Order Size Small Medium Large Online Sales 1 to 10 skeins 11 to 20 skeins Over 20 skeins Retail Sales 1 to 10 boxes 11 to 20 boxes Over 20 boxes An analysis of the previous year's records produced the following statistics. Items Retail sales boxes (12 skeins per box) Online sales, skeins Number of retail orders Number of online leads Cost Driver Amount $ 769,500 Boxes of yarn sold to retail stores 526,220 Number of online leads 189,900 Skeins sold online 86,400 Number of retail orders $ 1,572,020 Small 3,500 91,000 605 469,310 Order Size Medium Large 63,000 190,000 64,000 56,000 3,015 5,980 436,530 146,600 Total 256,500 211,000 9,600 1,052,440
Transcribed Image Text:After studying the costs incurred over the past two years for one of its products, skeins of knitting yarn, Jackson has selected four categories of selling costs and chosen cost drivers for each of these costs. The selling costs actually incurred during the past year and the cost drivers are as follows: Cost Category Sales commissions Pay-per-click/Search engine optimization Cost of online sales Credit and collection Total selling costs The knitting yarn is sold to retail outlets in boxes, each containing 12 skeins of yarn. The sale of partial boxes is not permitted. Commissions are paid on sales to retail outlets but not on online sales. The cost of online sales includes technology infrastructure costs and the wages of personnel who process the online orders. Jackson believes that the selling costs vary significantly with the size of the order. Order sizes are divided into three categories as follows: Order Size Small Medium Large Online Sales 1 to 10 skeins 11 to 20 skeins Over 20 skeins Retail Sales 1 to 10 boxes 11 to 20 boxes Over 20 boxes An analysis of the previous year's records produced the following statistics. Items Retail sales boxes (12 skeins per box) Online sales, skeins Number of retail orders Number of online leads Cost Driver Amount $ 769,500 Boxes of yarn sold to retail stores 526,220 Number of online leads 189,900 Skeins sold online 86,400 Number of retail orders $ 1,572,020 Small 3,500 91,000 605 469,310 Order Size Medium Large 63,000 190,000 64,000 56,000 3,015 5,980 436,530 146,600 Total 256,500 211,000 9,600 1,052,440
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