Carreclerc Company Carreclerc is a major supermarket chain. In February 2021, the store located in the...

  

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Carreclerc Company Carreclerc is a major supermarket chain. In February 2021, the store located in the close suburb of Paris was given the opportunity to increase its surface area. The manager wants to assess the profitability of its three main product lines: Beverages, Fresh products, and Canned products. Here is the annual data (in curos) available to him (2020 figures) for each product line: Sales Cost of goods sold Beverages € 320 000 € 250 000 Fresh products €850 000 €610 000 Canned products - € 630 000 € 480 000 The store total indirect costs (Rent, Salaries, Electricity, etc.) amount to €360 000. Up until now, Carreclere has allocated all indirect costs between product lines in proportion to the sales generated by each product line. It thus determines a profit per product line and a profit rate (profit of the product line/Sales of the product line). Question 1: What is the amount of indirect costs allocated to the Fresh Products? Question 2: After allocating Store indirect costs of €360,000 to the 3 product lines, determine: The full cost of each product line The total profit generated by each product line. The Profit rate of each product line Carreclerc is considering changing the method of allocating its indirect costs and implementing an ABC method. To this end, an analysis of the main activities and their respective costs has been carried out (2020 annual data): Activity Activity description Processing returns Placing orders Placing on shelves Processing the return of empty bottles to the store Managing deliveries Unloading and reception of goods Assisting customers Placing purchase orders with suppliers Placing merchandise on the shelf and replenishing shelves Provide assistance to customers Cost to manage returned bottles Number of orders: Number of deliveries received Number of hours spent putting merchandise on shelves Number of items sold 144 120 216 h Total Activity Cost €4 800 50 400 €62 400 € 100 800 In addition, the following information was also collected (2020 annual Beverages Fresh Products 4 800 € €69 120 €122 880 0€ 336 876 2160 h 441 600 u Cost driver The full cost of each product line The total profit generated by each product line The Profit rate of each product line Directly assigned to the Beverage product line 624 orders 1 260 deliveries 3 456 hours spent 614 400 items sold data): Canned products 0€ 144 264 1 080 h 122 400 u Question 3: What is the cost driver unit cost for each activity? Question 4: After allocating Store indirect costs of €360,000 to the 3 product lines using the ABC method, determine: 23 Carreclerc Company Carreclerc is a major supermarket chain. In February 2021, the store located in the close suburb of Paris was given the opportunity to increase its surface area. The manager wants to assess the profitability of its three main product lines: Beverages, Fresh products, and Canned products. Here is the annual data (in curos) available to him (2020 figures) for each product line: Sales Cost of goods sold Beverages € 320 000 € 250 000 Fresh products €850 000 €610 000 Canned products - € 630 000 € 480 000 The store total indirect costs (Rent, Salaries, Electricity, etc.) amount to €360 000. Up until now, Carreclere has allocated all indirect costs between product lines in proportion to the sales generated by each product line. It thus determines a profit per product line and a profit rate (profit of the product line/Sales of the product line). Question 1: What is the amount of indirect costs allocated to the Fresh Products? Question 2: After allocating Store indirect costs of €360,000 to the 3 product lines, determine: The full cost of each product line The total profit generated by each product line. The Profit rate of each product line Carreclerc is considering changing the method of allocating its indirect costs and implementing an ABC method. To this end, an analysis of the main activities and their respective costs has been carried out (2020 annual data): Activity Activity description Processing returns Placing orders Placing on shelves Processing the return of empty bottles to the store Managing deliveries Unloading and reception of goods Assisting customers Placing purchase orders with suppliers Placing merchandise on the shelf and replenishing shelves Provide assistance to customers Cost to manage returned bottles Number of orders: Number of deliveries received Number of hours spent putting merchandise on shelves Number of items sold 144 120 216 h Total Activity Cost €4 800 50 400 €62 400 € 100 800 In addition, the following information was also collected (2020 annual Beverages Fresh Products 4 800 € €69 120 €122 880 0€ 336 876 2160 h 441 600 u Cost driver The full cost of each product line The total profit generated by each product line The Profit rate of each product line Directly assigned to the Beverage product line 624 orders 1 260 deliveries 3 456 hours spent 614 400 items sold data): Canned products 0€ 144 264 1 080 h 122 400 u Question 3: What is the cost driver unit cost for each activity? Question 4: After allocating Store indirect costs of €360,000 to the 3 product lines using the ABC method, determine: 23

Answer rating: 100% (QA)

Particulars Beverages Fresh Products Canned Products Sales 32000000 85000000 63000000 Cost of Goods ... View the full answer