A manager has prepared a profitability report for the managers. The report shows data for each product. Factory overhead and marketing expenses were allocated using activity-based costing methods.

	Laptops	Tablets	Cell Phones	Total
Sales	$1,200,000	$900,000	$800,000	$2,900,000
Cost of Goods Sold	(650,000)	(400,000)	(700,000)	(1,750,000)
Gross Profit	$ 550,000	$500,000	$100,000	$1,150,000
Marketing Expenses	(575,000)	(100,000)	( 60,000)	( 735,000)
Operating Income	$ (25,000)	$400,000	$ 40,000	$ 415,000

Additional information about each product was gathered from upper management.

• Laptops are an older product with excellent recognition in the market.
• Tablets are a newer product and was just released in the previous year.
• Cell phones have the most updated technology that cannot be matched in the current market. So far, customers are responding well to the phones.