1. Prepare a schedule that shows the gross margin for both products. Begin by allocating the indirect resources to the cost pools. First identify the formula labels, then compute the allocated processing acti Plant and machinery Engineering costs Total indirect cost X Percent of indirect resource used = X % = % = II Processing activity cost Next, identify the formula labels, then compute the allocated production support cost. Plant and machinery Engineering costs Total indirect cost X X Allocated cost Percent of indirect resource used = Allocated cost % % = Indirect Resource Engineers and CAD Equipment Percent of Resource Used In Plant and Machinery 90% Processing activity Production support activity 10% Print Done X Percent of indirect resource used = 11 Allocated cost 30% 70% Panel A Statement of Operating Income [External Reporting Purpose] Sales Cost of goods sold: Direct material Direct labor Indirect Tuner D Contribution to Corporate Costs and Profit [Internal Strategic Decision-Making and Operational-Control Purpose] Pen Casings Cell Phone Casings $ 510,000 $ 430,000 $ 80,000 34,600 22,400 147,900 132,000 222,000 199,800 Manufacturing Cost of goods sold 404,500 354,200 Gross profit $ 105,500 $ 75,800 Corporate expenses 69 12,200 15,900 22,200 50,300 29,700 Panel A Statement of Operating Income [External Reporting Purpose] Sales Cost of goods sold: Direct material Direct labor Process activity Production-support activity Cost of goods sold Gross profit Corporate expenses TuneTO Contribution to Corporate Costs and Profit [Internal Strategic Decision-Making and Operational-Control Purpose] Pen Casings Cell Phone Casings $ 510,000 $ 430,000 $ 80,000 34,600 22,400 12,200 147,900 132,000 15,900 143,400 129,060 * 14,340 78,600 15,720 62,880 + 404,500 299,180 105,320 $ 105,500 $ 130,820 69 (25,320) Statement of Operating Income [External Reporting Purpose] [Internal Strategic Decision-Making and Operational-Control Purpose] Pen Casings Cell Phone Casings Sales Cost of goods sold: Direct material Direct labor Process activity Production-support activity Cost of goods sold Gross profit (deficit)