Question 7

Northern Rivers Orchards Ltd grows avocadoes, macadamia nuts and mangoes for the commercial wholesale markets.

Unit sales, price and cost data for the last year were as follows:

Avocadoes Macadamias Mangoes

Sales Volume 40,000 trays 160,000 kg 40,000 trays

Average Price $30/tray $10/kg $10/tray

Variable Costs $10/tray $2/kg $5/tray

Fixed Costs $40,000 $100,000 $20,000

a) If corporate expenses of $160,000 are allocated across the three product divisions based on sales revenue, prepare a divisional performance report across the three product divisions. (6 marks)

b) Comment on the results in a) with the help of the net profit margin (NPM) for each division. Recall the NPM is sales revenue/net profit. You can ignore any taxes.

(3 Marks)

Answer:

NOTE: Please probide answer for b