Consider two products in the same product area:

Sales price (per unit) Direct material cost Direct labor cost

Product 1 $62 $16 $14

Product 2 $78 $34 $12

Assuming the above unit price and costs remain unchanged, calculate the net operating profit margins of these products in 2009 and 2010 using the overhead allocation method as in the case. Which of the two products is more profitable?

Overhead allocation rate 2009: .61 2010: .98\

I really need help understanding this. It seems straight forward but please explain your answer