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5-42. ABC, implementation, ethics. (CMA, adapted) Plum Electronics, a division of Berry Corporation, manufactures two large-screen television models: the Mammoth, which has been produced since
5-42. ABC, implementation, ethics. (CMA, adapted) Plum Electronics, a division of Berry Corporation, manufactures two large-screen television models: the Mammoth, which has been produced since 2013 and sells for $990, and the Maximum, a newer model introduced in early 2015 that sells for $1,254. Based on the following income statement for the year ended November 30, 2017, senior management at Berry have decided to concentrate Plum's marketing resources on the Maximum model and to begin to phase out the mammoth model because maximum generates a much bigger operating income per unit. Plum Electronics Income Statement for the Fiscal Year Ended November 30, 2017 Mammoth Maximum Total Revenues $21,780,000 $5,016,000 $26,796,000 Cost of goods sold 13,794.000 3,511.200 17,305,200 Gross Margin 7,986,000 1,504,800 9,490,800 Selling and administrative expense 6.413.000 1.075.800 7.488.800 Operating income $ 1,573,000 $ 429,000 $ 2,002,000 Units produced and sold 22,000 4,000 Operating income per unit sold $ 71.50 $ 101.25 Details for cost of goods sold for Mammoth and Maximum are as follows: Mammoth Maximum Total Per Unit Total Per Unit Direct Materials $5,033,600 $228.80 $2,569,600 $642.40 Direct 435,600 19.80 184,800 46.20 Manufacturing Labor
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