Fanshawe College / MGMT8500 / MGMT8500 MGMT 8500 / PROBLEM 5-10 Contrasting ABC and Tra Question O Answered step-by-step PROBLEM 5-10 Contrasting ABC and Traditional Product Costs [L01 - CC1; ] - CC3, 6, 7] CHECK FIGURE 1. (2b] Deluxe chair, gross margin = 3% of sales "See, I told you we made a good decision by introducing the Business and Deluxe chairs. Look at the profits generated by the two chairs that we are selling at a premium." These were the words of Linda Badger, CEO of Badger Chair Company [BCC). However, Steve Radcliffe, the VP of operations, did not echo her enthusiasm. "Linda, I must say my people on the shop floor are not too happy with the accounting report. They are still unable to believe that the Business and Deluxe chairs made money. According to them the production of these chairs