a) total gross profit (loss) red, yellow, green

b) total gross protit (loss) yellow, green

C NM Chp 06 Homework Assign... http://ezto mheducati on.com/hm.tpx B Overview of Assignments e HP See What's Hot a WildTangent Games fo... I don't understand this. Last year [year 1], we decided to drop our highest-end Red model and only produce the Yellow and Green mode because the cost system indicated we were losing money on a Red. Now, looking at the preliminary numbers, our profit is actually lower than last year and it looks like Yellow has become a money loser, even though our prices, Volumes, and direct costs are the same. Can someone please explain this to me and maybe help me decide what to do next year? Robert Dolan President & CEO Dolan Products Dolan Products is a small, family-owned audio Component manufacturer. Several years ago, the Company decided to concentrate on only three models, Which were Sold under many brand names to electronic retailers and mass-market discount stores. For internal purposes, the company uses the product names Red, Yellow, and Green to refer to the three components. Data on the three models and selected costs follow. Year 1 Red Yellow Green Total 10.000 Units produced and sold 5.000 20.000 35.000 Sales price per unit $150 $100 75 Direct materials cost per unit 70 50 3 Direct labor-hours per unit 0.5 Wage rate per hour 20 20 20 Total manufacturing overhead $750,000 This year (year 2), the company only produced the Yellow and Green models. Total overhead was $650,000. All other volumes, unit prices, costs, and direct labor usage were the same as in year 1 The product cost system at Dolan Products allocates manufacturing overhead based on direct labor-hours Required: a. Compute the product costs and gross margins (revenue less cost of goods sold) for the three products and total gross profit (loss) for year 1. Do not round intermediate calculations. Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Red Yellow Green otal Product cost per unit 160.00 5 95.00 52.50 Gross margin (loss) per unit 5.00 Total gross profit (loss) 18 AM