#1

Regular Compony produces oudio equipment, specifically heodphones and speakers. A new CEO hos just been hired and announces a new policy that if a product connot earn a morkup of at leost 25 percent, it will be dropped. The morkup is computed as product gross profit divided by reported product cost. Monufacturing overheod for year 1 totoled $966,000. Overheod is allocated to products bosed on direct moterials cost. Doto for year 1 show the following: Required: a-1. Calculote the markup for both heodphones and speokers. a-2. Bosed on the CFO's new policy, which of the two products should be dropped? b. Regardless of your answer in requirement (o), the CFO decides at the beginning of year 2 to drop the speakers from the product line. The company cost analyst estimates that overhead without the speaker line will be $605,000. The revenue ond costs for headphones are expected to be the same as lost year. What is the estimated markup for heodphones in year 2 ? Complete this question by entering your answers in the tabs below. Calculate the markup for both headphones and speakers. (Enter your answers as a percentage rounded to 1 decimal place (i.e., 32.1).)