The Meyers Parts Company has divided its business into three product lines. Product Line A is expected to generate sales revenue of $900,000 a year, with costs of sales amounting to $490,000. Product Line B should yield sales of $600,000 a year, with costs of sales of $390,000. Product Line C should have sales of $1,500,000, with costs of sales of $1,040,000. Traceable fixed costs of each line are $250,000, $200,000, and $350,000, respectively. Costs common to all product lines are $300,000.

Required:
1. Measure the profit performance of each product line.
2. Which of the three product lines earns the best profit level? How did you measure “best?”
3. Would your answer change if the common costs were allocated on the basis of
sales dollars? In equal shares (1/3 each)? Explain.