Question
For each of the seven product categories, compute the average operating profit per unit and unit operating margin (expressed as a percentage of average unit
For each of the seven product categories, compute the average operating profit per unit and unit operating margin (expressed as a percentage of average unit price) under the current system where other operating costs (i.e., beyond COGS) are allocated to product categories using revenues. For this question, you can use the $2.8 million total figure given in the case.
| Product Category | 2005 Annual Sales $ | Average Price per Unit $ | Gross Margin | SKUs Carried | Inventory Turns (per year) | Average Weight per unit (lbs) | Inbound Shipping Cost $ | Average Size per unit (cubic feet) | Special Handle SKUs | Return Rate |
| Table and barware | 8,631,000 | 32 | 44% | 1,979 | 6.3 | 6.9 | 224,000 | 0.42 | 60% | 3.2% |
| Small appliances | 5,928,000 | 78 | 34% | 882 | 6.1 | 8.4 | 176,900 | 0.86 | 26% | 4.2% |
| Cookware | 4,252,000 | 80 | 42% | 815 | 7.5 | 6.6 | 97,100 | 0.61 | 12% | 3.1% |
| Cooking tools | 1,168,000 | 18 | 50% | 330 | 5.1 | 1.3 | 17,200 | 0.10 | 2% | 1.7% |
| Storage | 2,419,000 | 23 | 49% | 296 | 7.8 | 3.7 | 44,100 | 0.35 | 19% | 3.0% |
| Bakeware | 1,488,000 | 19 | 46% | 474 | 5.6 | 2.6 | 26,000 | 0.16 | 13% | 1.8% |
| Cutlery | 3,921,000 | 56 | 43% | 406 | 8.3 | 2.5 | 39,700 | 0.12 | 0% | 2.5% |
| Total | 27,807,000 | 39 | 42% | 5,182 | 6.5 | 4.7 | 625,000 | 0.40 | 19% | 2.9% |
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Fundamentals of Cost Accounting
Authors: William Lanen, Shannon Anderson, Michael Maher
3rd Edition
978-0077398194
