P&G Company currently produces and sells two products, Life and Buoy. The following data weregathered from P&G's previous year's operations:- The company was able to sell 20,000 Life at a selling price of $20 each while 10,000 Buoy was sold ata selling price of $50. The contribution margin ratio of Life and Buoy are 40% and 30% respectively.- Each product has separate product managers which receives an annual salary of $20,000 each. Theproduct manager is in charge of sales force utilization and compensation. Total employee benefitexpense for the period amounted to $ 80,000 and $50,000 for Life and Buoy, respectively.- The product managers are also in charge of the advertising of each product. Direct advertising expensesfor Life amounted to $ 15,000 while Buoy, $ 9,000.- Other direct fixed costs amounted to $ 10,000 and $ 5,000 for Life and Buoy, respectively.- Common corporate overhead expenses totaked $80,000 for the year. It is the company's policy toallocate common corporate overhead based on total sales.1. What is the controllable margin of each product?2. What is the segment margin of each product?3. How much is the Net income of P&G.

Name: P&G Company currently produces and sells two products, Life and Buoy.
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Description: P&G Company currently produces and sells two products, Life and Buoy. The following data weregathered from P&G's previous year's operations:- The company was able to sell 20,000 Life at a selling price of $20 each while 10,000 Buoy was sold ata sell

The income statement can be prepared in many ways according to the determination of the net income.…

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1. What is the controllable margin of each product? 2. What is the segment margin ofeach product? 3. How much is the Net income of P&G.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 29P: Jellison Company had the following operating data for its first two years of operations: Jellison...

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