Hydraulic Hoses, Inc. produces specialized industrial hoses for applications such as high-pressure hydraulics and the transference of highly corrosive materials. The company recently implemented an ABC system for three of its products and is interested in evaluating its effectiveness before converting to an ABC system for all of its products. To perform this evaluation the company has compiled data for the three products using both the traditional system and the new ABC system. The traditional system uses a single driver (direct materials costs). The ABC system uses a variety of cost drivers related to the activities used to produce the metal products. The three products involved in the trial run of the ABC system were D-13, K-17, and R-23. The following data relate to these products.

	Selling Price per Unit			Units Produced			Total Costs Allocated: Traditional Costing				Cost per Unit:			Total Cost Allocated:ABC				Cost per Unit ABC
Product											Traditional Costing
D-13	$	15.50			360,000			$	3,456,000		$	9.60			$	3,312,000		$	9.20
K-17		18.40			225,000				2,407,500			10.70				2,340,000			10.40
R-23		19.60			25,000				270,000			10.80				481,500			19.26
Totals								$	6,133,500						$	6,133,500

Required

1. Determine the gross profit margin for each product produced based on the ABC data.

2. Determine the gross profit margin for each product produced based on the traditional costing data.