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Ken Yalters, the COO of FreshSkin, asked his cost management team for a product line profitability analysis for his firm's two products - Askin
Ken Yalters, the COO of FreshSkin, asked his cost management team for a product line profitability analysis for his firm's two products - Askin and Bskin. The two products are skin care products that require a large amount of research and development and advertising. He received the report below. Ken concluded that Askin was the more profitable product, and that perhaps cost-cutting measures should be applied to the Bskin product. Askin Bskin Total Sales Cost of goods sold Gross profit $ 4,007,000 (2,603,500) $ 2,603,500 $ 6,610,500 (2,107,000) (4,710,500) $ 1,403,500 $ 496,500 $ 1,900,000 Research and development Selling expenses Profit before taxes (1,177,000) (133,500) 589,500 Seventy-five percent of the research and development and selling expenses were traceable to Askin. Profit before taxes for the Bskin product, per life-cycle income statements, Is: Multiple Choice C $168,875. $418,875. $516,375. $326,375. $201,375.
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