Refer to the information about Voss Visuals in Problem 7.20. Voss’s managers have gathered the following information about selling and administrative costs.

Required

a. Using the information given here and in Problem 7.20, calculate the product margin per unit for tablets and books using the traditional costing system.

b. Prepare a report like the one in Exhibit 7.12, Panel A.

c. Using the information given here and in Problem 7.20, calculate the product margin per unit for tab lets and books using the activity-based costing system. Be sure to include selling and administrative costs.

d. Prepare a report like the one in Exhibit 7.12, Panel B.

e. Based on your analysis, what actions might the managers consider taking to improve the profitability of books and of the company overall?

Transcribed Image Text:

Activity Pool Total Cost Cost Driver Shipping Advertising $300,000 Pounds shipped Number of mailings Sales price 187,500 Commissions 129,375 Total selling and administrative costs $616,875 Tablets Books Weight Advertising mailings 20,000 pounds 40,000 pounds 25,000 100,000 Sales commission 5% of sales price 8% of sales price Selling price per unit $35 $75