Cost Data Total

DL costs 18,400,000

Other direct costs 7,400,000

Total direct cost 25,800,000

Indirect cost for allocating:

Sales 7,900,000

Design 2,900,000

Support 5,400,000

services 1,900,000

Cost data for product Store based Web Based

Units 100,000 9,900,000

Total direct costs 10,075,000 8,225,000

Selling price/unit 100 2.50

Actual indirect support activity:

Sales person 28,400 3,400

Design hrs 35,000 5,000

Other hours 90,000 24,000

Customer support calls 70,000 7,000

For each store based and web based, calculate the gross profit.

Using ABC allocation approach, reallocate indirect support activities to each product line