Basic Premium Total 400 600 1,000 Sales volume (units) Revenue Variable costs $60,000 $60,000 $120,000 Direct materials $25,000 $15,000 $40,000 Direct labor $15,000 $10,000 $25,000 Contribution margin $20,000 $35,000 $55,000 Fixed costs $50,000 $5,000 Profit Use direct labor dollars as the cost driver. Compute allocated fixed costs for Basic: $30,000 $2.00 $20,000 $45,000 $50,000