Prepare a schedule showing Redwood Companys total selling cost for each order size and the per-skein selling cost within each order size.

Exercise 5-35 Page 204:

1. Prepare a schedule showing Redwood Company’s total selling cost for each order size and the per-skein selling cost within each order size.

 

 

Redwood Company

Selling Costs Computation by Order Size and Skein within Each Order Size

Order Size
Small Medium Large Total
Sales CommissionsA[Unit Cost: $675,000/225,000 = $3.00 Per Box] $6,000 $135,000 $534,000 $675,000
CatalogsB [Unit Cost: $295,400/590,800 =$0.50 Per Catalog 127,150 105,650 62,600 295,400
Costs of Catalog SalesC [Unit Cost: $105,000/175,000 = $0.60 Per Skein] 47,400 31,200 26,400 105,000
Credit and CollectionD [Unit Cost: $60,000/6,000 = $10 Per Order 4,850 24,150 31,000 60,000
Total Cost Per Order Size $185,400 $296,000 $854,000 $1,135,400
Units [Skeins] SoldE 103,000 592,000 2,180,000
Unit Cost Per Order SizeE $1.80 $0.50 $0.30

A Retail Sales in Boxes x Unit Cost:

Small: 2,000 x $3

Medium: 45,000 x $3

Large: 178,000 x $3

B Catalogs Distributed x Unit Cost

C Catalog Sales x Unit Cost

D Number of Retail Orders x Unit Cost

E Small: [2,000 x 12] + 79,000 = 103,000

Medium: [45,000 x 12] + 52,000 = 592,000

Large: [178,000 x 12] + 44,000 = 2,180,000

Total Cost Per Order Size ÷ Units Sold

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