A company is making a study of the relative profitability of the two products A and B. In addition to direct costs, indirect selling and distribution costs to be allocated between the two products are as under:

One unit of product A requires a storage space twice as much as product B. The cost to pack and forward one unit is the same for both the products. Sales men are paid salary plus commission @ 5 per cent on sales and equal amount of efforts are put forth on the sales of each of the products.
Required:
(i) Set up a schedule showing the apportionment of the indirect selling and distribution costs between the two products.
(ii) Prepare a statement showing the relative profitability of the two products.

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Insurance charges for inventory (finished) Storage costs Packing and forwarding charges Salesmen salaries Invoicing costs. Other details are: *78,000 1,40,000 7,20,000 8,50,000 4,50,000 Product A Product B Selling price per unit 500 1,000 Cost per unit (exclusive of indirect selling and distribution costs) 300 600 Annual sales in units 10,000 8,000 Average inventory (units) 1,000 800 Number of invoices 2,500 2,000