Fleet Street Incorporated a manufacturer of high$-$fashion clothing for women, is located in South London in the UK$.$ Its product line consists of trousers $(34\%),$ skirts $(21\%),$ dresses $(13\%),$ and other $(32\%).$ Fleet Street has been using a volume$-$based rate to assign overhead to each product; the rate it uses is $2\mathrm{.}64$ per unit produced. The results for the trousers line, using the volume$-$based approach, are as follows:

Number of units produced $10,000$

Price $($all figures in $)31\mathrm{.}15$

Total revenue $311,500$

Direct materials $51,300$

Direct labor $171,200$

Overhead $($volume$-$based$)26,400$

Total product cost $248,900$

Nonmanufacturing expenses $46,600$

Total cost $295,500$

Profit margin for trousers $16,000$

Recently, Fleet Street conducted a further analysis of the trousers line of product, using ABC. In the study, eight activities were identified, and direct labor was assigned to the activities. The total conversion cost $($labor and overhead$)$ for the eight activities, after allocation to the trousers line, is as follows:

Pattern cutting $32,350$

Grading $27,600$

Lay planning $26,800$

Sewing $30,800$

Finishing $20,400$

Inspection $9,200$

Boxing up $5,000$

Storage $10,000$

Required:Fleet Street Incorporated a manufacturer of high$-$fashion clothing for women, is located in South London in the UK$.$ Its product line

consists of trousers $(34\%),$ skirts $(21\%),$ dresses $(13\%),$ and other $(32\%).$ Fleet Street has been using a volume$-$based rate to assign

overhead to each product; the rate it uses is $2\mathrm{.}64$ per unit produced. The results for the trousers line, using the volume$-$based

approach, are as follows:

Recently, Fleet Street conducted a further analysis of the trousers line of product, using ABC. In the study, eight activities were

identified, and direct labor was assigned to the activities. The total conversion cost $($labor and overhead$)$ for the eight activities, after

allocation to the trousers line, is as follows:

Required:

Determine the profit margin for trousers using ABC.

Answer is complete but not entirely correct.

$72,150$

$1.$ Determine the profit margin for trousers using ABC.